Investing.com - Futures linked to Canada's main stock index pointed slightly lower on Wednesday, as investors eyed a fresh climb in oil prices and prepared for a key Bank of Canada interest rate decision.
By 08:11 ET (12:11 GMT), the S&P/TSX 60 index standard futures contract had dipped by 2 points, or 0.1%.
An attack on a refinery in Saudi Arabia sent oil prices jumping by more than $2, once again reviving concerns over a widening Middle East conflict. The Bank of Canada is expected to raise rates for the first time since July 2023 in a bid to quell energy-fueled inflation.
Elsewhere, gold prices fell ahead of a separate rate announcement from the Federal Reserve, while a slightly firmer dollar put downward pressure on bullion.
In the prior session, the S&P/TSX composite index advanced to a six-day high, bolstered in large part by solid quarterly earnings from supply chain electronics manufacturing services group Celestica. An uptick in gold prices also supported the materials sector, which includes metal mining shares.
Nasdaq futures rise
Meanwhile, Nasdaq futures advanced after blowout earnings from memory chip giant SK Hynix sparked a global rally in artificial intelligence-linked semiconductor stocks, while investors turned their focus to a batch of megacap technology earnings and the Fed decision.
By 08:27 ET, the Nasdaq 100 futures contract had gained 122 points, or 0.4%, while S&P 500 futures had risen by 17 points, or 0.2%, and Dow futures were mostly unchanged.
SK Hynix's American Depository Receipts rose as much as 7% in premarket U.S. trade, while its Seoul shares soared more than 10% after the group posted blowout third-quarter earnings and outlined plans for massive shareholder returns.
The company, a key supplier to the AI industry, logged record profit and revenue in the third quarter, and said it planned to return a total 100 trillion won ($75.5 billion) to shareholders in 2026.
AI-fueled memory demand is also anticipated to keep markets tight until at least 2030, triggering a broad rally across chipmaking and AI-exposed shares, SK Hynix said.
Rival Samsung Electronics (KS:005930) jumped roughly 9% in Seoul trade, while Micron Technology (NASDAQ:MU) added over 3% premarket.
Away from SK Hynix, traders are preparing for quarterly earnings from software titan Microsoft (NASDAQ:MSFT) and Google-parent Alphabet (NASDAQ:GOOGL), which are expected to offer more insight into AI expenditures in the coming months.
Like other big-name tech firms, Microsoft and Alphabet have laid out plans to spend hundreds of billions of dollars on their AI ambitions, but have faced mounting shareholder scrutiny over whether these investments will yield adequate returns. Amazon (NASDAQ:AMZN) -- another major AI spender --- is also set to report earnings on Thursday.
Beyond tech, GE Vernova (NYSE:GEV), KLA (NASDAQ:KLAC), T-Mobile US (NASDAQ:TMUS), and Automatic Data Processing (NASDAQ:ADP) are also set to report on Wednesday.
"[S]ince Tuesday night-Thursday night is the peak volume period of the Q3 season, investors are spending most of their time this morning sifting through company releases," analysts at Vital Knowledge said in a note.
Fed tipped to skip October rate hike
The Fed is widely expected to leave interest rates unchanged at the conclusion of a two-day meeting on Wednesday. The central bank hiked rates by 25 basis points in September.
Markets are now hutning for any clues into the Fed's rate trajectory, especially in the face of sticky inflation. Fed Chair Kevin Warsh has reiterated the bank's commitment to reaching its 2% annual inflation target, although he has stressed a desire not to provide forward guidance to investors. Warsh's press conference after the Fed decision will be closely watched for more commentary.
Investors see a roughly three-in-four chance that the Fed will eventually raise rates again at its final meeting of the year in December, according to CME FedWatch, a tracker of rate probabilities.
"Expectations are that there will be no rate rise at the FOMC meeting this week, though futures point to a December hike, reinforcing the likelihood of higher rates for longer," said Jeff O'Connor, U.S. Head of Market Structure and Sell Side ATS Strategy at Liquidnet.
Beyond the Fed meeting, third-quarter gross domestic product data and the September personal consumption expenditures price index are due on Thursday. The PCE index, in particular, is one of the Fed's preferred inflation gauges.
Original Article
TSX futures muted ahead of Bank of Canada rate decision
Lynx sees SK Hynix results rekindling interest in this chip stock
