TSX higher amid earnings wave and trade negotiations

Investing.com - Canada’s main stock exchange rose on Tuesday, as investors digested a raft of corporate returns, looked ahead to key economic data and geared up for crucial central bank decisions.

By 4.01 ET (10:31 GMT), the S&P/TSX 60 index standard futures contract had ticked up by 5.73 points, or 0.35%.

The S&P/TSX composite index was settled up 0.5% or 134 points at 27,539.88.

A trade deal between the U.S. and European Union over the weekend was in line with traders’ expectations, soothing some concerns over tariff-fueled uncertainty and weighing on the safe-haven appeal of assets like gold. The yellow metal’s price slipped, denting mining shares.

Still, the future of trade talks between Ottawa and Washington remain unclear, with Prime Minister Mark Carney saying the negotiations are now in an intense phase.

The outcome of these discussions -- and their economic implications -- could factor into a fresh policy decision from the Bank of Canada on Wednesday. The Federal Reserve will also unveil its own rate announcement on the same day.

U.S. stocks down

The Dow Jones Industrial Average was down 204 points, or 0.46%, the S&P 500  index was down 15.7 points, or 0.15%, and the NASDAQ Composite shed 80 points, or 0.38%.

The U.S.-EU deal was the latest in a flurry of pacts the White House has raced to secure before August 1, when heightened "reciprocal" tariffs on a host of countries are due to come into effect.

"In terms of big trade deals yet to be secured, the market will still be on the lookout for deals with Asia (South Korea, Taiwan, India) and perhaps anything new for Mexico and Canada, too," ING analysts said in a note.

With this in mind, the U.S. and China are expected to resume their latest round of trade talks in Sweden on Tuesday, with Beijing facing an August 12 deadline to reach a longer-lasting tariff agreement with Washington.

Both sides had previously agreed on preliminary trade pacts earlier this year which cooled an intensifying trade war marked by rapidly escalating tit-for-tat tariffs and the squeezing-off of crucial rare earth minerals exports.

Fed meeting starts

The Fed kicks off its two-day policy meeting later in the session. While rates are expected to stay at 4.25%–4.5% when the announcement is made on Wednesday, investors will watch closely for signals on a possible cut later this year.

Fed Chair Jerome Powell has recommended a wait-and-see attitude as the policymakers await more clarity around the impact of the Trump administration’s aggressive tariff agenda, but there have been signs of dissent within the FOMC, with a couple of members recently calling for lower rates.

U.S. President Donald Trump on Monday again called on the Federal Reserve to cut interest rates, saying it would help propel the U.S. economy.

The Bank of Japan also holds a key meeting on Thursday, where it is expected to keep rates unchanged.

Tariffs and their inflation impact will be in focus Thursday with the release of June’s PCE price index, the Fed’s preferred inflation gauge.

Investors will also watch key labor data this week, including JOLTS Job Openings later in the session, ADP (NASDAQ:ADP) private payrolls on Wednesday, jobless claims on Thursday, and the key July jobs report on Friday.

"Magnificent Seven" earnings due

The busiest week of the earnings season is heating up, with more than 150 companies in the S&P 500 due to post their quarterly results.

This includes “Magnificent Seven” members like Facebook-owner Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) on Wednesday, followed by Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) on Thursday.

Gold bounces

Gold prices edged higher Tuesday, rebounding from near three-week lows, as easing global trade tensions limited demand for the safe-haven metal.

Bullion has fallen for the past four consecutive sessions as recent U.S. trade progress eroded demand for haven assets. Caution ahead of the Fed meeting also kept gold range-bound, with traders unwilling to take large positions.

At 04.01 ET, spot gold inched up 0.3% to $3,325.77 an ounce, while gold futures also gained 0.4% to $3,380.20/oz.

Crude rises once more

Elsewhere, oil prices ticked higher. At 4.01 ET, Brent futures gained 3.75% to $71.92 a barrel, and U.S. West Texas Intermediate crude futures added 4.1% higher to $69.44 a barrel.

Brent touching extended its gains from Monday record, the highest level since July 18, after the U.S.-EU deal sidestepped a full-blown trade war between the two major allies that would have dimmed the outlook for fuel demand.

The agreement also calls for $750 billion of EU purchases of U.S. energy in the coming years.