TSX futures inch lower as investors eye Trump tariff developments, earnings deluge

Investing.com - Futures linked to Canada’s main stock index edged lower on Monday, with U.S. President Donald Trump’s tariff policy in focus and investors awaiting a slew of key corporate earnings reports this week.

By 06:59 ET (10:59 GMT), the S&P/TSX 60 index standard futures contract had slipped by 3 points, or 0.2%.

The Toronto Stock Exchange’s S&P/TSX composite index rose by 86.02 points, or 0.4%, in its prior session on Thursday, notching its highest closing mark since April 3. The average ticked up by 2.6% in a holiday-shortened week, the biggest such advance since September.

Underpinning some positive sentiment were expectations that the Bank of Canada will resume cutting interest rates in the coming months, after keeping borrowing costs on hold on Wednesday. Rate-sensitive sectors like real estate and utilities rose.

U.S. futures point lower

U.S. stock futures slipped on Monday as investors assessed the impact of Trump’s tariff plans and gauged his scathing remarks about Federal Reserve Chair Jerome Powell.

By 06:54 ET (10:54 GMT), the Dow futures contract had slumped by 361 points, or 0.9%, S&P 500 futures had dipped by 56 points, or 1.0%, and Nasdaq 100 futures had fallen by 212 points, or 1.1%.

The main averages on Wall Street were closed on Friday, while some markets, including much of Europe, were on holiday for Easter Monday, meaning liquidity was relatively thin.

"[I]t’s very likely April 2 was the high-water mark for tariffs, and we fully expect ongoing negotiations to yield ’deals’ that bring down the duty burden," analysts at Vital Knowledge said, referring to the date when Trump revealed his sweeping reciprocal tariffs on both friends and foes alike.

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Trump officials have said they are aiming to sign dozens of agreements during the ongoing 90-day pause to the elevated duties on a host of nations, although experts have cast doubt over whether this will be achievable.

Meanwhile, Trump has revived threats to oust Powell from his role at the helm of the U.S. central bank, accusing him of moving to slowly to bring down interest rates. However, the New York Times (NYSE:NYT) has reported that the president is aware that the action may shake already-jittery global financial markets.

Against this backdrop, investors are gearing up for a bevy of corporate earnings reports this week.

Highlighting the slate of returns will be Google-parent Alphabet (NASDAQ:GOOGL) and Elon Musk-helmed electric carmaker Tesla (NASDAQ:TSLA), who will become the first of the so-called "Magnificent Seven" mega-cap tech names to unveil their latest results.

Traders will likely be keen to see if the figures and potential guidance provide some relief for markets still reeling from massive ructions in the recent weeks sparked by Trump’s tariff policies. In recent years, the Magnificent Seven stocks have largely been the driving force behind U.S. equity market gains, although shares in these businesses have declined so far this year.

The VIX volatility index, a gauge of investor fears, has dipped to around 30 after cresting at roughly 60 during the levy-fueled market turmoil earlier this month. The long-term median level is at around 17.6, LSEG Datastream figures cited by Reuters showed.

Chipmaker Intel (NASDAQ:INTC), drug manufacturer Merck (NSE:PROR), tech firm IBM (NYSE:IBM), and Pampers-parent Procter & Gamble (NYSE:PG) are also on the earnings docket this week, as well as American Airlines (NASDAQ:AAL). The carrier’s rival United Airlines (NASDAQ:UAL) last week provided a two-pronged outlook for the year, including one scenario forecasting a recession that sparks a deep hit to revenue and profit.

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Elsewhere, shares in Netflix (NASDAQ:NFLX) edged higher in premarket U.S. trading after executives at the streaming service suggested that they were confident that it could withstand the economic fallout from Trump’s tariffs.

Recent figures have pointed to deteriorating U.S. consumer sentiment and spiking inflation expectations, leading to some increased concerns that price-conscious customers may rein in nonessential spending, including on streaming subscriptions.

But, following better-than-expected quarterly results published after the close of U.S. trading last Thursday, Netflix co-CEO Greg Peters said the group has yet to see a significant change in consumer behavior.

Gold touches record high

Gold prices hit a new record high on Monday, supported by fears over a tit-for-tat trade war between the U.S. and China as well as a weakening dollar against a basket of currency peers.

Spot gold had risen by 2.0% to $3,393.73 by 07:03 ET. Gold futures expiring in June also surged by 2.3% to $3,405.09.

Bolstering bullion was a decline in the U.S. dollar index to a three-year low, which can make the yellow metal less expensive for foreign buyers and drive up demand. Gold is also seen as a relative safe haven during times of economic uncertainty or market upheaval.

Oil prices drop

Meanwhile, oil prices dropped on indications that progress was being made in talks between the U.S. and Iran, which analysts say could boost supplies. Worries that a tariff-fueled economic downturn could dent demand also weighed on crude.

Brent crude futures sank by 2.4% to $66.30 a barrel by 06:57 ET, after having advanced by 3.2% on Thursday. U.S. West Texas intermediate crude fell by 2.6% to $62.36 per barrel following a 3.5% increase in the prior session.

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The last settlement for the contracts was on Thursday due to the Good Friday holiday.

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