’Fasten your seatbelts’— BTIG strategists warn of coming turbulence
Investing.com -Canada’s main stock exchange closed down on Tuesday, as investors assessed the impact of a conflict between Israel and Iran that has entered its fifth day.
The Toronto Stock Exchange’s S&P/TSX composite index lost 27.2 points, closing down 0.10% at 26,541.39
Comments from U.S. President Donald Trump at the gathering in the Canadian province of Alberta particularly bolstered optimism that Washington could soon roll out new trade deals.
Trump suggested that an agreement with Canada -- a frequent target of his trade-related ire -- was possible, although he stressed that tariffs would still be involved. Canada, a major exporter of steel and aluminum to the United States, now faces U.S. levies on these metals, but Prime Minister Mark Carney said that the two countries could have a fresh economic and security deal wrapped up within 30 days.
U.S. stocks falter
U.S. stock index dropped amid fears over an intensification in the Israel-Iran conflict, ahead of the release of key retail sales data and the start of a two-day Federal Reserve meeting.
TheDow Jones Industrial Averagefell 0.70% 42,215.80 , theS&P 500 closed down 0.85%, and theNASDAQ Composite fell 0.33%
Trump calls for Tehran evacuation
That positive tone has quickly dissipated after Trump said in a social media post that “everyone should evacuate Tehran,” as hostilities between Israel and Iran continued.
Trump also chided Iran for not accepting an earlier nuclear deal. Trump has also repeatedly stated that Iran will not be allowed to enrich any uranium, despite Tehran’s claims that it has no plans to develop nuclear weaponry.
Trump departed the G7 gathering in Canada early, and in a social media post, said the departure had "nothing to do with a CeaseFire," adding that it was instead related to something "much bigger than that." He did not elaborate further.
Prior to Trump’s exit, the G7 nations had issued a statement calling for an easing to the conflict, but placed their support behind Israel and described Iran as a source of instability in the Middle East.
Fed starts policy-setting meeting
Beyond geopolitical tensions, the focus this week is on a swathe of U.S. economic cues, with retail sales and industrial production data due later on Tuesday.
The prints are expected to provide more insight into how U.S. consumers and businesses are grappling with increased trade tariffs, with any signs of cooling likely to spark more concerns over the world’s biggest economy.
The Federal Reserve kicks off a two-day meeting later in the session, and is widely expected to leave interest rates unchanged at the conclusion of the meeting on Wednesday.
But comments from Chair Jerome Powell, on the path of interest rates, will be squarely in focus, amid signs of cooling inflation and some resilience in the economy.
The Bank of Japan left interest rates unchanged as widely expected earlier Tuesday, and stated that it will reduce the pace at which it is tapering its monthly bond purchases from the next fiscal year.
Crude gains
Oil prices rose Tuesday after the IEA was positive about global growth while traders continued to assess the conflict in the Middle East.
At 4.05 ET, Brent futures gained 4..7% to $76.72 a barrel and U.S. West Texas Intermediate crude futures rose 4.62 % to $73.53 a barrel.
Global oil demand will keep growing until around the end of this decade despite peaking in top importer China in 2027, as cheaper gasoline and slower electric vehicle adoption in the United States support consumption, the International Energy Agency said on Tuesday.
Oil demand will peak at 105.6 million barrels per day (bpd) by 2029 and then fall slightly in 2030, a table in the Paris-based IEA’s annual report shows. At the same time, global production capacity is forecast to rise by more than 5 million bpd to 114.7 million bpd by 2030.
Gold steadies
Gold prices steadied after retreating on Monday, as uncertainty swirled around the Israel-Iran conflict.
Bullion reversed a bulk of its recent gains after reports that Iran was seeking a ceasefire spurred some risk-on sentiment on Monday. But Tehran said it will not seek a truce when under fire from Israel, while the warning from Trump also ramped up concerns that an escalation in the fighting was imminent.