TSX index rises after U.S. CPI, Iran ceasefire talks in focus

Investing.com - Canada’s main stock index is trading higher on Friday, as investors reacted to the latest U.S. inflation data and kept tabs on a shaky ceasefire in the Middle East.

By 12:31 ET, the S&P/TSX 60 index is up by 10 points, or 0.5%, while the S&P/TSX Composite is up 180 points, also 0.5%.

Aiding the commodity-heavy index was a marginal climb in oil prices, with crude supported by ongoing disruptions to supply flows through the vital Strait of Hormuz off of Iran’s southern coast.

On Thursday, the S&P/TSX composite index snapped a six-session winning streak, falling by 0.4% to end at 33,477.71.

U.S. stocks subdued

U.S. stocks are mostly lower. By 12:31 ET (17:31 GMT), the Dow had fallen by 256 points, or 0.5%, while the S&P 500 was down 6 points or 0.1%, and the Nasdaq 100 had risen by 61 points, or 0.3%.

The main averages on Wall Street caught a bid in the previous session, buoyed by comments from Israeli Prime Minister Benjamin Netanyahu that he had ordered his government to begin talks with Lebanon. Despite the announcement of a temporary U.S.-Iran ceasefire earlier this week, Israel has continued to hit Iran-aligned Hezbollah targets in Lebanon, including on Friday morning.

Iranian officials have appeared to suggest that should Israel, which launched its joint campaign with the U.S. on Tehran in late February, carry on with its strikes on Hezbollah, potential weekend talks on a protracted peace agreement with Washington may be imperiled. There has also been disagreement between the U.S. and Iran over whether Lebanon was a part of their two-week ceasefire deal forged this week.

Yet the prospect of a prolonged, albeit uneasy, end to hostilities in the Middle East has seemingly bolstered risk sentiment. U.S. stocks have now notched a seven-day winning streak, while the blue-chip Dow Jones Industrial Average has climbed back into positive territory for the year.

Away from the war, consumer discretionary stocks were lifted on Thursday after Amazon CEO Andy Jassy announced that the firm’s artificial intelligence services at its key cloud division are raking in more than $15 billion.

Hormuz disruptions persist

Tanker traffic through the Strait of Hormuz is still near a virtual standstill, with Reuters reporting that shipping through the narrow waterway off of Iran’s southern coast was well below 10% of normal volumes on Thursday despite the ceasefire. Iran, whose chokehold on the strait has threatened the flow of around a fifth of the world’s oil, has told vessels that they must keep to its territorial waters while making any sailings.

Several Asian countries are heavy importers of crude products which traverse the strait, while Europe uses natural gas from Persian Gulf nations which have been targeted by Iranian attacks.

Bombardments of Saudi energy facilities have also slashed the kingdom’s oil output capacity by about 600,000 barrels per day and throughput on its East-West Pipeline by roughly 700,000 barrels per day, Saudi state news agency SPA reported on Thursday.

The prospect of slow protracted shipping through the Strait of Hormuz and a decline in production in Saudi Arabia, a major crude center in the Middle East, pushed up oil prices.

Brent crude futures, the global oil benchmark, were steady at $95.92 a barrel, while U.S. West Texas Intermediate crude futures had ticked up by 0.2% to $98.02 per barrel. The temporary U.S.-Iran ceasefire has put oil prices on track for their biggest weekly decline since June 2025, although crude is still well above levels before the start of the joint U.S.-Israeli assault on Iran in late February.

U.S. CPI

U.S. consumer price growth accelerated sharply in March, largely driven by a spike in energy costs due to the Iran war, although the increase had been widely anticipated by markets.

In the twelve months to March, the consumer price index rose by 3.3%, compared to 2.4% in February and economists’ expectations of 3.4%. It was the largest increase since June 2022, when oil prices were rocketing higher in the wake of the outbreak of the war in Ukraine.

Month-on-month, the closely-tracked inflation gauge from the Labor Department jumped by 0.9%, versus 0.3% in the preceding month. The figure was seen at 1.0%.

Energy prices, in particular, spiked by 12.5% on an annualized basis, up dramatically from 0.5% in February.

The national average retail gasoline price has broken above $4 a gallon for the first time in over three years. The cost of diesel, a key source of fuel for the transportation of goods like food, has shot up as well.

Ahead of the release, analysts at ING argued that the Fed may choose not to give too much weight to the headline figure for now.

Earlier this week, February’s personal consumption expenditures price index, the Fed’s preferred inflation gauge, was in line with expectations. Gross domestic product data also showed U.S. economic growth was substantially slower than initially expected in the fourth quarter.

Gold on pace for weekly gain

Gold prices, meanwhile, hugged the flatline, leaving the yellow metal on track for a weekly rise.

Despite bullion’s traditional appeal as a safe-haven asset, it has largely faltered during the Iran conflict. The surge in oil prices stoked inflation concerns and raised expectations that the Federal Reserve could keep interest rates higher for longer -- posing a possible headwind for a non-yielding asset like gold.

Instead, investors flocked to the U.S. dollar, further denting gold’s appeal by making it more expensive for overseas buyers. But, given the fresh hopes for a lasting ceasefire, a tracker of the greenback against a basket of its currency peers was last weaker by more than 1% over the past one-week period.