Bay Street Eyes Positive Start Despite U.S. Tariff Threat

(RTTNews) - Higher Canadian and U.S. futures, and firm commodity prices amid reports of fresh diplomatic efforts to ease the Middle East conflict point to a positive start on Bay Street Tuesday morning.

Meanwhile, U.S. President Donald Trump's decision to impose additional 50% tariffs on a wide range of goods imported from Canada may weigh on sentiment and limit market's upside.

Trump signed three Proclamations pursuant to Section 338 of the Tariff Act of 1930 on Monday to impose additional tariffs, saying that the move was in retaliation for what he called "Canada's discriminatory treatment of American products" such as cars, dairy and alcohol.

Canadian stocks edged lower on Monday, extending the losses from Friday's session, after the U.S. and Iran signaled embarking a diplomatic route to end their hostilities while investors parsed benign Canadian inflation data.

After opening a little higher than the previous week's close, today the benchmark S&P/TSX Composite Index gained further momentum but lost quickly and traded firmly negative throughout the rest of the session before settling at 34,960.32, down by 303.53 points (or 0.86%).

Asian stocks turned in a mixed performance on Tuesday as chip stocks rebounded from recent declines, helping offset concerns over a return of armed hostilities in the Middle East. Reports of mediation efforts between the United States and Iran helped limit regional losses, if any.

The major European markets are slightly higher with investors continuing to track geopolitical news and awaiting the European Central Bank's monetary policy announcement due later this week.

In commodities trading, West Texas Intermediate crude oil futures are up $1.10 or 1.3% at $84.33 a barrel.

Gold futures are gaining $47.00 or 1.18% at $4,062.90 an ounce, while Silver futures are up $2.158 or 3.78% at $59.230 an ounce.