TSX futures edged higher on Friday as investors braced for crucial U.S. inflation data, which could influence the Federal Reserve’s interest rate decision next week. By 07:03 ET, the S&P/TSX 60 index futures gained 11 points, or 0.5%. The S&P/TSX composite index had dropped 1.1% on Thursday, marking its fourth consecutive daily decline and the lowest close since July. Rising oil prices, driven by escalating Middle East tensions, have pushed crude back above $100 a barrel, fueling inflation concerns and tightening policy expectations.
U.S. stock futures also rose, with the Dow Jones Industrial Average futures up 300 points, or 0.6%, the S&P 500 futures climbing 43 points, or 0.6%, and Nasdaq 100 futures advancing 183 points, or 0.6%. The S&P 500 fell for a fourth straight session on Thursday, pressured by bond market volatility. Analysts at Deutsche Bank noted that rising bond yields had reduced the appeal of risk assets. The European Central Bank’s rate hike and speculation of further increases have heightened market anxiety.
Traders are closely watching the upcoming U.S. consumer price inflation data for August, with the headline CPI expected to hold steady at 3.4% and core CPI projected to ease slightly to 2.4%. However, concerns persist over persistent inflation, especially after producer prices showed faster cost increases in August. Markets now assign a two-in-three chance of a 25 basis point Fed rate hike next week, up from 60% a week ago.
In geopolitical developments, Oman is organizing a meeting with Gulf states and Iran to discuss restoring commercial shipping through the Strait of Hormuz. Oil prices dipped over 3% on the news but remain on track to finish the week above $100 a barrel for the first time in nearly four months. Meanwhile, gold prices stabilized, with spot gold rising 0.6% to $4,343.33 an ounce, though the metal faces pressure from tighter Fed policy expectations.