Sept 2 (Reuters) - Futures tracking Canada's blue-chip stocks were muted on Wednesday, as markets grappled with fresh strikes in the Iran war and rising yields ahead of the Bank of Canada's interest-rate decision.
September futures on the S&P/TSX index were down 0.13% at 06:15 a.m. ET (1015 GMT).
Iran and its Arab neighbours were plunged back into war as U.S. forces hit Iran's southern coast and Iran struck at American bases across the region.
However, oil prices were little changed after hitting one-month highs earlier in the session.
Elevated oil prices stemming from the conflict are driving inflation worries, which, coupled with concerns over ballooning government debt, have pushed bond yields to multi-month highs.
The benchmark U.S. 10-year Treasury yield was at 4.816% on Wednesday, its highest since early 2025. The yield on the Canadian equivalent was last at 3.769%, slightly off from a similar high.
Against this backdrop, comments from policymakers at the Bank of Canada will be closely watched following their interest-rate decision, which is widely expected to be a hold.
Employment reports in the U.S. and Canada, due later this week, could largely shape monetary policy expectations going forward, especially after U.S. Federal Reserve Chair Kevin Warsh reiterated his stance on fighting inflation.
On Wednesday, prices of gold and silver also slipped, in another blow to commodity-heavy Canadian markets.
Meanwhile, Prime Minister Mark Carney's Liberal Party won three special elections on Tuesday, maintaining his slim majority in Parliament at a time of worsening U.S. trade ties.
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Reporting by Purvi Agarwal in Bengaluru; Editing by Shreya Biswas
