Geopolitics And Tech Spending Cloud Canadian Stock Outlook

(RTTNews) - The Canadian stock market is seen opening on a weak note on Thursday as worries about escalating tensions in the Middle East and concerns over spending on AI infrastructure may weigh on sentiment and force investors to tread cautiously.

Yemen's Iran-aligned Houthis claimed attacks on two Saudi oil tankers in the Red Sea, while American forces launched a 12th consecutive night of strikes on Iran.

US Central Command said the latest operation targeted Iranian military sites and was intended to weaken Tehran's ability to threaten civilian mariners and commercial shipping. Tehran has warned that it would respond to attacks in kind.

Concerns about AI spending have risen following Alphabet raising its capex guidance for the year, triggering worries the move might result in a substantial drop in the company's free cash flow. The Google parent said it looks to spend over $200 billion on AI infrastructure.

In Canadian earnings news, Teck Resources reported earnings per share of $1.93 for the second quarter of this financial year, compared to $0.38 in the year-ago quarter.

Mullen reported earnings per share of $0.37 in the second quarter of current financial year, compared with $0.28 a year earlier.

Waste Connections reported earnings per share of $1.50 for the second quarter of current financial year, compared with $1.29 in the year-ago quarter.

Bay Street closed on a positive note on Wednesday following a surge in the gold-linked materials sector and a jump in the oil-linked energy sector while investors watched Middle East developments amid concerns of fresh U.S. tariffs.

The benchmark S&P/TSX Composite Index, which traded firmly positive, settled at 35,485.11, up by 116.03 points or 0.33%.

Asian stocks closed broadly higher as renewed AI optimism helped offset escalating Middle East tensions as well as concerns over surging oil prices. Stocks related to artificial intelligence led the surge despite broader valuation concerns.

The major European markets are down in negative territory as rising oil prices and renewed concerns over spending on AI infrastructure weigh on sentiment.

In commodities, West Texas Intermediate Crude oil futures are up $3.85 or 4.4% at $90.68 a barrel.

Gold futures are down $62.90 or 1.51% at $4,089.00 an ounce, while Silver futures are down $1.478 or 2.45% at $58.820 an ounce.