Canada's TSX stock index futures decline, as escalating conflict in Iran drives oil prices soaring above $100 per barrel

Investing.com - On Monday, major Canadian stock index futures declined, reflecting investor sentiment remains subdued amid ongoing tensions in Iran with little sign of easing.

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As of 8:01 a.m. Eastern Time (11:46 a.m. GMT), S&P/TSX 60 Index futures fell 20 points, down 1.1%.

Conflict in the Middle East has intensified, with U.S. and Israeli allied forces engaging with Iran. Key regional infrastructure has been targeted, including major oil-producing countries in the Gulf.

Oil prices surged to their highest levels since 2022 but later pared gains, while gold was pressured by a strengthening dollar. Canadian TSX futures, which have a high weighting in commodities, retreated from recent record highs amid concerns that rising oil prices could reignite inflation.

U.S. Stock Index Futures Drop Sharply

U.S. stock index futures fell sharply as escalating Middle East tensions pushed oil prices well above $100 per barrel, raising fears that higher energy costs could slow the U.S. economy.

As of 6:15 a.m. Eastern Time (10:15 a.m. GMT), Dow futures declined over 540 points, down 1.1%, S&P 500 futures dropped 70 points, down 1%, and Nasdaq 100 futures fell 270 points, down 1.1%.

By the end of last week, major Wall Street indices had declined at least 1%, reflecting concerns that the conflict in the Middle East could impact the global economy.

Oil Price Surge Sparks Inflation and Growth Concerns

Over the weekend, tensions between the U.S., Israel, and Iran escalated, causing crude oil prices to soar, leading to significant market sell-offs.

U.S. benchmark WTI crude rose to around $120 per barrel amid fears of supply disruptions and risks to shipping through the Strait of Hormuz, a critical global oil trade route.

The surge in oil prices has heightened worries that a new energy shock could push inflation higher and weaken U.S. consumer spending.

Persistent increases in oil prices could complicate the Federal Reserve’s policy outlook, as inflationary pressures remain high even if economic growth shows signs of slowing.

IMF Managing Director Kristalina Georgieva warned that a 10% rise in oil prices could increase global inflation by 0.4 percentage points.

In a keynote speech at an event in Japan, Georgieva said, “We need to consider the unimaginable and be prepared for it.”

Last week’s unexpectedly weak February non-farm payroll report renewed concerns about the resilience of the U.S. labor market.

Monday’s U.S. economic data calendar is mostly empty, but Wednesday will see the release of the monthly U.S. Consumer Price Index, a key inflation indicator. On Friday, the Federal Reserve’s preferred inflation measure—the Personal Consumption Expenditures Price Index—and job vacancy data will be released.

Gold Prices Fall but Remain Above $5,000 per Ounce

Gold prices retreated but remained above intraday lows, as the escalation of the U.S.-Israel-Iran conflict drove funds into the dollar and oil.

As of 7:50 a.m. Eastern Time, spot gold fell 1.6% to $5,087.14 per ounce, and gold futures declined 1.3% to $5,093.85 per ounce. Earlier, spot gold dipped to a low of $5,015.23 per ounce.

While gold benefits from increased safe-haven demand, its gains were limited by concerns that the war’s inflationary effects could prompt major central banks worldwide to adopt more hawkish policies.

Mojtaba Appointed as New Supreme Leader

With little sign of an end to the Middle East conflict, Iran appointed Mojtaba Khamenei as the country’s new Supreme Leader following the assassination of his father, Ali Khamenei.

Mojtaba is widely seen as a hardliner, and U.S. President Donald Trump called him “unacceptable.” He is expected to maintain Iran’s confrontational stance toward the West.

Meanwhile, Trump posted Sunday night that rising oil prices are an acceptable consequence of military action against Iran’s nuclear program, as energy costs have been passed on to U.S. gas stations.

Hims & Hers Health Surges on Deal with Novo Nordisk

On corporate news, Hims & Hers is expected to release its latest quarterly earnings after the close Monday, with Kohl’s, Oracle Financial Software, Dollar General, and Dick’s Sporting Goods scheduled to report later this week.

Additionally, Bloomberg reports that Novo Nordisk plans to sell its weight-loss drugs through Hims & Hers’ telemedicine platform, marking an unexpected settlement after recent legal disputes.

Hims’ stock has plummeted about 51% this year, but pre-market trading on Monday surged over 50%.