News overnight that Iran and Israel reached a temporary ceasefire sent shockwaves through global markets.
Markets kicked off Tuesday with a risk-on tone as TSX futures pushed higher, boosted by reports of a ceasefire agreement between Iran and Israel. The rally comes despite lingering geopolitical uncertainties, a dip in oil prices, and investor caution ahead of fresh inflation data and remarks from the U.S. Federal Reserve.
Markets kicked off Tuesday with a risk-on tone as TSX futures pushed higher, boosted by reports of a ceasefire agreement between Iran and Israel. The rally comes despite lingering geopolitical uncertainties, a dip in oil prices, and investor caution ahead of fresh inflation data and remarks from the U.S. Federal Reserve.
News overnight that Iran and Israel reached a temporary ceasefire sent shockwaves through global markets. Investors rotated back into equities, lifting TSX futures by over 0.5% premarket. Meanwhile, safe-haven assets like gold edged lower, and crude oil prices retreated nearly 3% as geopolitical risk premiums unwound.
While the ceasefire headlines offer relief, traders remain wary: any renewed tensions could reverse todayโs bounce in a heartbeat.
Canada CPI (8:30โฏAM ET):
Investors expect Mayโs core CPI to rise around 0.2โ0.3% month-over-month, with headline CPI up ~0.2%. A cooler-than-expected print may boost sentiment and support small caps.
U.S. Data:
The economic calendar is packed with the Richmond Fed Manufacturing Index, Case-Shiller Home Price Index, FHFA Home Prices, and Consumer Confidence numbers โ all releasing before noon.
Fed Chair Powellโs Testimony:
Powell speaks later today, and markets will parse every word for clues about future rate cuts. While the Fed remains divided, Powell has signaled that sustained evidence is needed before loosening policy, especially as new tariffs pose fresh inflation risks.
Traders are eyeing several high-volatility names this morning:
LSE: Showing the strongest spikeability in premarket, but watch for choppy price action โ avoid chasing and wait for clean setups.
RYDE & LGHL: Meme momentum and low float conditions could spark squeezes โ watch for volume confirmation.
RELI: Attempted a bounce play but showed weak follow-through; keep on radar for potential reclaim above key levels.
Oil & Energy Small Caps: With crude down sharply, energy-linked penny stocks may see sympathy moves โ watch news flow closely.
Use VWAP and premarket highs as clear guides.
Focus on tight risk, partial profit-taking, and fast exits if momentum stalls.
Be prepared for intraday swings if CPI surprises or Powellโs tone shifts market sentiment.
Markets are enjoying a relief rally this morning, but the sustainability hinges on todayโs inflation numbers and the Fedโs message. For small cap traders, volatility means opportunity โ but donโt chase blindly. Stay nimble, trade what you see, and lock in profits on the way up.
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