Oil Drop Won't Drag Down Canadian Stocks, for Now

Canadian stock futures rose 0.42% as oil prices slipped 3.6%. The unexpected move came after a Financial Times report suggested Middle East foreign ministers are discussing a deal with Iran to resume shipping in the Strait of Hormuz.

The easing of shipping risk could lead to lower inflation worries, which would reduce the likelihood of a Federal Reserve rate hike next week. However, markets are still pricing nearly 70% odds of an increase in interest rates, based on CME Group's FedWatch tool.

A hot US Consumer Price Index (CPI) report on Friday could harden those bets, pushing bond yields up and weighing on 'rate-sensitive' parts of the TSX, such as financials and growth stocks. On the other hand, a cooler-than-expected CPI reading might offset weaker energy sentiment and keep the broader index steady.