TSX futures slip as traders eye Canadian bank earnings, Fed rate cut bets

Investing.com - Futures linked to Canada’s main stock index edged higher on Wednesday, as investors assessed a string of domestic bank earnings and hopes for U.S. interest rate reductions.

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By 07:11 ET (12:11 GMT), the S&P/TSX 60 index standard futures contract had risen by 6 points, or 0.3%.

The S&P/TSX composite index dipped by 52.50 points, or 0.2%, on Tuesday, a second straight session retreating from an all-time peak on Friday.

Markets were pouring over upbeat returns from Bank of Nova Scotia, while shares of Laurentian Bank surged by 18.4% after Fairstone Bank said it would purchase the lender.

Shopify shares also ticked higher after the e-commerce group said merchants on its platform had notched record sales over the Black Friday and Cyber Monday sales events.

U.S. futures advance

U.S. stock futures rose Wednesday, as growing confidence in a Fed rate cut and a rebound in Bitcoin helped steady sentiment.

At 07:16 ET, Dow Jones Futures traded 61 points, or 0.1%, higher, S&P 500 Futures gained 9 points, or 0.1%, and Nasdaq 100 Futures gained 24 points, or 0.1%.

The main averages on Wall Street advanced in the prior session, shrugging off some risk-off sentiment at the onset of the trading week.

Rising Fed rate cut expectations

Investors were now turning much of their focus back to expectations for a Federal Reserve interest rate cut later this month.

Odds of that the U.S. central bank will bring down borrowing costs by a quarter of a percentage point at the end of its December 9-10 gathering have hovered around 87%, CME FedWatch has shown, reflecting widespread bets that policymakers will feel comfortable providing support to a sputtering labor market despite signs of sticky inflation.

On the economic front, attention is turning to Wednesday’s release of the private-sector payrolls report from ADP Research Institute, offering an early peek at the strength of the labour market.

Later, on Friday, the markets will get to see the delayed publication of the Personal Consumption Expenditures Price Index (PCE), the Fed’s preferred gauge of inflation, along with personal income and spending figures.

The PCE print could heavily influence expectations about the magnitude and timing of rate cuts.

Meanwhile, risk assets got a boost from a rebound in cryptocurrency markets. Bitcoin climbed back above the mid-$90,000 range after sharp losses earlier in the week, giving a lift to crypto-linked stocks and improving overall risk appetite among investors.

The rebound in crypto and tech names helped underpin broader gains on Wall Street.

Marvell to buy Celestial AI

Marvell Technology has confirmed a multi-billion deal to buy semiconductor startup Celestial AI, as the U.S. chipmaker looks to expand its compute capacity during an ongoing surge in demand driven by the artificial intelligence boom.

Crucially, the $3.25 billion transaction grants Marvell access to Celestial’s work on photonics, a process that harnesses light instead of electrical signals to establish connections between AI and memory chips. Meaningful revenue contributions from the Celestial acquisition are expected to materialize in the second half of Marvell’s fiscal 2028.

Elsewhere, the likes of Pure Storage (NYSE:PSTG), CrowdStrike Holdings (NASDAQ:CRWD) and Okta (NASDAQ:OKTA) will be in the spotlight after the companies reported earnings after the close Tuesday.

Crude prices surge

Oil prices rose as an immediate deal to end the war in Ukraine looked unlikely, leaving a persistent threat to supply in play.

Brent futures climbed 1.1% to $63.15 a barrel, and U.S. West Texas Intermediate crude futures rose 1.3% to $59.41 a barrel.

Russia and the U.S. did not come to an agreement on a possible peace deal for Ukraine after a lengthy meeting between Russia President Vladimir Putin and U.S. envoys Steve Witkoff and Jared Kushner late Tuesday.

Oil markets are awaiting the outcome of the talks to see if a deal could lead to the removal of sanctions on Russian companies that would free up restricted oil supply.

Rising U.S. inventories also added to the concerns about a crude surplus, after the American Petroleum Institute reported on Tuesday that crude stocks rose by 2.48 million barrels in the week ended November 28.

The U.S. Energy Information Administration will release official government stockpile data later on Wednesday.

Gold prices stabilize

Gold prices held largely steady on Wednesday, as investors waited for more U.S. economic data and next week’s Fed meeting.

Spot gold last traded flat at $4,206.72 an ounce. U.S. Gold Futures gained 0.4% to $4,237.15.

The yellow metal previously hit a six-week high of $4,264.29/oz earlier this week.