Canadian Investors Focus on Earnings and Rate Cut Bets Amid Global Stock Rally

Global stocks rise as investors bet on a US Federal Reserve rate cut. Canadian TSX futures follow Wall Street sentiment higher. Suncor Energy and Dream Industrial REIT are among Canadian companies reporting earnings. Oil prices are little changed as traders assess rising OPEC+ supply and weaker demand. The Canadian dollar weakens against the US dollar, while the US 10-year note yield rises to 4.221%.

Global stocks surged on Tuesday, reflecting investors' growing confidence in a potential Federal Reserve rate cut following the release of weak U.S. jobs data. The U.S. dollar steadied, and the euro fell against the dollar as markets anticipated the central bank's policy shift. The S&P 600 and Asian markets mirrored this trend, with the MSCI's broadest index of Asia-Pacific shares outside Japan climbing 0.8% [1].

The U.S. stock market rallied on Monday, buoyed by positive earnings reports and increased expectations for a September rate cut. The Fed's odds of a rate cut rose to 94%, according to CME Fedwatch, from 63% seen on July 28 [1]. This sentiment was bolstered by President Donald Trump's decision to fire the head of labor statistics, which added to concerns about the politicization of interest rate policy [1].

Canadian TSX futures also followed Wall Street's lead, with the S&P/TSX 60 index futures contract falling 17 points, or 1.0%, as investors anticipated higher U.S. import tariffs [2]. The TSX composite index sank 0.9% on Friday, marking its sharpest decline since April 10 [2]. The looming tariffs, set to come into effect on August 7, have cast a shadow over Canadian markets, particularly with the prospect of a 35% duty on goods not covered by the U.S.-Mexico-Canada Agreement [2].

Oil prices remained relatively stable despite a production hike by OPEC+. Brent crude futures traded near two-week lows at $68.45 a barrel, while U.S. West Texas Intermediate crude futures fell 1.6% to $66.23 a barrel [1]. The Organization of the Petroleum Exporting Countries and their allies agreed to raise oil production by 547,000 barrels per day for September, reversing a significant portion of their output cuts [1].

The Canadian dollar weakened against the U.S. dollar, while the US 10-year note yield rose to 4.221%. Suncor Energy and Dream Industrial REIT are among Canadian companies reporting earnings this week, which may influence market sentiment further [2].

References:
[1] https://www.reuters.com/world/china/global-markets-wrapup-3-2025-08-05/
[2] https://www.investing.com/news/stock-market-news/tsx-futures-slip-with-higher-us-tariffs-due-to-take-effect-in-coming-days-4167559