TSX futures point higher after index inches back from record high

Investing.com - Futures tied to Canada’s main stock exchange ticked higher on Thursday, after the index edged away from a recent record high in the prior session.

By 06:43 ET (10:43 GMT), the S&P/TSX 60 index standard futures had risen by 2 points, or 0.1%.

Toronto Stock Exchange’s S&P/TSX composite index fell by 214.46 points, or 0.8%, on Wednesday, retreating from an all-time closing high and ending a 10-day winning streak.

A jump in Canadian 10-year yields to their highest level since January weighed on equities. Investors have been cutting bets that the Bank of Canada will pursue interest rate reductions since recent data showed hot underlying inflation in April.

The moves also mirrored an uptick in U.S. Treasury yields, which have risen amid debate over a massive tax and spending bill that could add to America’s massive $36.2 trillion debt pile. A tepid auction for 20-year bonds exacerbated some of these worries.

U.S. stock futures muted

U.S. stock index futures traded in a muted fashion Thursday, steadying after the previous session’s sharp selloff on concerns over high U.S. debt levels.

At 06:56 ET, Dow Jones Futures slipped 33 points, or 0.1%, while S&P 500 Futures rose 7 points, or 0.1%, and Nasdaq 100 Futures gained 44 points, or 0.2%.

The main averages slumped on Wednesday, with the blue chip Dow Jones Industrial Average falling over 800 points.

Tax bill adds to debt concerns

The U.S. House of Representatives is tipped to hold a pre-dawn vote on Trump’s "big, beautiful" budget bill, with Republicans in power in the chamber hoping to overcome days of internal disagreements over the measure.

Along with the extension of 2017 tax cuts, the legislation would slash taxes charged on tips and car loans, while boosting spending on defense and border security. Reductions to key food and health programs for low-income Americans are also included in the bill.

Moody’s downgraded its U.S. sovereign credit rating late last week, citing the failure of successive U.S. governments to rein in the country’s massive debt pile.

Passage of the tax bill has also become a key point of uncertainty for markets, amid concerns that cuts to taxes will slash federal revenues and further increase the government’s dependence on debt.

Trump has so far claimed that his trade tariffs will help overcome the fiscal shortfall stemming from his tax cuts. But revenue from his tariffs so far has been a fraction of the amount required to improve the government’s fiscal health.

Crude falls on OPEC+ output talk

Oil prices fell further Thursday on renewed oversupply concerns, following a report suggesting that a group of top producers was considering raising output levels once more.

At 06:57 ET, Brent Oil Futures fell 2.0% to $63.63 per barrel and West Texas Intermediate (WTI) crude futures dropped 2.1% to $60.33 per barrel.

The Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, is discussing whether to agree on another large production increase at their meeting on June 1, Bloomberg News reported on Thursday.

An output hike of 411,000 barrels a day (bpd) for July is among the options under discussion, although no final agreement has yet been reached, the report said, citing delegates.

OPEC+ has been in the process of unwinding output cuts, with additions to the market in May and June.

Gold prices inch lower

Gold prices dipped in European trade on Thursday, pulling back from recent gains due to a strengthening in the U.S. dollar that threatens the appeal of bullion from holders of foreign currencies.

However, demand for safe havens somewhat remained bolstered by persistent concerns over high U.S. debt levels and the passage of Trump’s tax bill.

Spot gold dipped 0.8% to $3,289.86 an ounce, while gold futures for June fell 0.7% to $3,288.64/oz by 06:58 ET.