Futures linked to Canada's main stock exchange pointed sharply higher on Monday, while gold gained and oil fell, as investors parsed through reports that the U.S. and Iran may be nearing a peace deal.
By 07:14 ET (11:14 GMT), the S&P/TSX 60 index standard futures contract had risen by 22 points, or 1.1%.
The Toronto Stock Exchange's S&P/TSX index inched towards a record closing level on Friday, rising by 0.2% to 34,471.36. It was the highest closing market since an all-time peak notched on March 2.
Global stocks jumped on Monday, yet trading was likely thin due to a holiday in a number of places, including the U.S. and Britain. In Europe, the pan-regional Stoxx 600 was up by 0.9%, approaching levels not seen since early March, while stocks in Germany and France advanced.
U.S. stock futures also climbed. The Dow futures contract had added 432 points, or 0.9%, S&P 500 futures had gained 70 points, or 0.9%, and Nasdaq 100 futures were higher by 409 points, or 1.4% by 06:51 ET. Markets on Wall Street will be closed today in observance of Memorial Day.
Iran and the United States have reached a framework of a deal to end their more than two-month old conflict, but a potential memorandum of understanding does not include specifics about the management of the Strait of Hormuz, according to a news report citing an Iranian foreign ministry spokesperson.
An agreement between Tehran and Washington cannot be said to be imminent, although both sides have reached conclusions on a range of topics, the spokesperson said, according to Reuters.
The comments come after media reports over the weekend, quoting a senior White House official, suggested that a framework deal has been reached. The reports said an agreement would include the reopening of the Strait of Hormuz, a vital waterway off Iran's southern coast through which roughly a fifth of the world's oil flows.
The strait has been all but shuttered to tanker traffic for weeks, driving up oil prices and fueling worries over a burst of inflation in countries around the world. Bets have grown that many central banks will react by lifting interest rates.
Oil prices fell sharply on Monday, with Brent breaking below $100 a barrel, but remain well above pre-war levels of around $70 a barrel.
Notably, the Iranian foreign ministry spokesperson said that Tehran will not be taking tolls from vessels traversing the strait, potentially reversing a major threat that Tehran would move to solidify a financial stranglehold over the conduit. However, the spokesperson noted that any services which will be provided will "require a price but should not be presented as tolls."
The draft agreement also reportedly includes a commitment by Iran to not pursue nuclear weapons and enter negotiations over its future uranium enrichment. Tehran has pledged not to develop a nuclear weapon, and has widely rejected U.S. demands to hand over its enriched uranium stockpile.
Iran's nuclear ambitions, coupled with the country's blocking of the Strait of Hormuz, have been two key points of focus since the U.S. and Israeli jointly launched an assault on Iran in late February.
Writing on social media, U.S. President Donald Trump flagged that he had told his representatives "not to rush into a deal," adding that the American blockade on Iranian ports would stay in effect until an agreement is "reached, certified, and signed."
Meanwhile, U.S. Secretary of State Marco Rubio said on Sunday that Washington would pursue all diplomatic avenues with Iran, but warned of "alternatives" if these efforts did not succeed.
Against this backdrop, gold prices shot higher, although lingering inflation worries kept a lid on much of the advance in the yellow metal.
Bets have grown that an energy-induced inflationary spike will lead central banks to hike interest rates, a trend that may not bode well for non-yielding assets like gold.
At the same time, the U.S. dollar has been seen as a relative safe haven for investment, thanks in part to the belief in some corners that the U.S. -- a major energy exporter -- will be able to economically withstand an energy shock brought on by the war.
A firmer dollar can take some of shine off of gold's appeal by making the yellow metal more expensive for overseas buyers. The dollar index, a tracker of the greenback against a basket of currency peers, weakened slightly on Monday.
