ASX 200 futures were down 21 points (-0.25%) at 8:30 am AEST, following a broad-based decline in both local and US equities amid renewed geopolitical tensions and cautious investor sentiment ahead of this week’s Federal Reserve meeting.
Markets were unsettled by escalating US-China trade tensions after President Donald Trump threatened new tariffs, including a 100% levy on foreign films, and confirmed no imminent dialogue with Chinese President Xi Jinping—a key driver of last week’s risk-on rally.
The ASX 200 fell 80 points (-0.97%) yesterday to 8,157, ending a seven-session winning streak. Energy (-2.89%), Financials (-1.56%) and Telecommunications (-1.14%) led the declines. Westpac fell 2.99% to A$32.45 after a weaker-than-expected net profit of A$3.3 billion and lower dividend. The result dragged peers NAB (-1.75%), Commonwealth Bank (-1.61%) and ANZ (-1%) lower.
Oil stocks slumped after OPEC+ confirmed a supply increase of 411,000 barrels per day. Santos fell 3.95%, Beach Energy lost 3.75%, and Woodside closed 3.59% lower.
Australian bond markets priced in a full 25 basis point rate cut from the Reserve Bank of Australia for May, with 108 basis points of cuts expected by year-end.
Tariff talk tips Wall Street
The S&P 500 snapped a nine-day winning streak overnight during a subdued session marked by low trading volumes. Despite strong first-quarter earnings results overall, Bank of America flagged potential weakness in second-quarter guidance.
The US Institute for Supply Management (ISM) Services Purchasing Managers’ Index rose unexpectedly to 51.6 in April, from 50.8 in March, beating consensus of 50.6. New Orders and Inventories expanded, while the Employment sub-index remained in contraction. Notably, Prices Paid surged to a two-year high of 65.1, signalling renewed inflationary pressures.
Ford dropped 1.07% after warning that tariffs could reduce 2025 earnings by US$1.5 billion. Tesla declined 2.42% as it failed to breach its 200-day moving average, and Berkshire Hathaway slipped 5% following confirmation that Warren Buffett will step down in 2026.
Markets are pricing no change from the Federal Reserve this week, with a 25 basis point rate cut expected in July and 76 basis points of cuts priced by year-end.
European markets log tenth straight gain as investors eye data and earnings
European sharemarkets extended their winning streak on Monday, with the FTSEurofirst 300 index adding 0.2% to mark its tenth consecutive session of gains—the longest run since August 2021. Investor sentiment remained upbeat ahead of a busy week of economic releases and corporate earnings.
Insurance stocks led sectoral advances, climbing 1.0%, while real estate shares rose 0.8%. However, a 0.6% decline in energy stocks, tracking weaker oil prices, weighed on broader gains. Shares in Erste Group Bank surged 8.7% after the Austrian lender announced the acquisition of a 49% stake in Poland-based Santander Bank Polska and 50% of Polish asset manager Santander TFI.
The London Stock Exchange remained closed for the UK’s Bank Holiday.
Currencies, commodities and metals
Currencies
In currency trade, the euro fell from US$1.1364 to US$1.1298 before stabilising near US$1.1315. The Australian dollar eased to around US64.65 cents, while the Japanese yen firmed slightly to JPY143.75 per US dollar.
Commodities
Oil prices fell sharply after OPEC+ agreed to accelerate production increases for a second month, with June output set to rise by 411,000 barrels per day. Brent crude dropped US$1.06 or 1.7% to US$60.23 per barrel, while US Nymex crude declined US$1.16 or 2.0% to US$57.13 per barrel—both benchmarks closing at their lowest levels since February 2021.
Metals
Gold futures gained US$79.00 or 2.4% to US$3,322.30 an ounce, supported by a weaker US dollar and rising safe-haven demand ahead of the US Federal Reserve’s policy decision. Spot gold was trading near US$3,331 at the US close.
Iron ore futures slipped US78 cents or 0.8% to US$97.41 per tonne amid weak demand from China, the prospect of steel production curbs, and rising inventories.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) dipped 0.87% yesterday to finish at 3,058.50. The index is 2.23% higher over the past five trading days.
Several small caps will be presenting at the RIU Sydney Resources Round-up, which starts today at the Hyatt Regency in Sydney and finishes on Thursday. Meanwhile, you can reade about the following and more throughout the day.
- Altech Batteries Ltd has delivered a key technical breakthrough in its Silumina Anodes™ Project, incorporating high-capacity silicon into lithium-ion batteries. Through in-house research and development, the company reports achieving a 30% increase in energy density while improving battery life. The proprietary silicon-enhanced product is branded as Silumina Anodes™.
- Asian Battery Metals PLC is advancing Phase 3 diamond drilling at its Oval copper-nickel-platinum group elements (Cu-Ni-PGE) discovery in Mongolia. The campaign is targeting high-priority geophysical anomalies to better define the depth and geometry of known high-grade and massive sulphide zones, while also aiming to expand the mineralised footprint at both the Oval prospect and surrounding areas.
- Dynamic Metals Ltd has announced initial assay results from 32 reverse circulation (RC) drill holes at the Cognac West prospect, part of its Widgiemooltha Project in Western Australia. The company is actively pursuing multiple gold targets across the project area.
- Novo Resources Corp. has released exploration results from the John Bull Gold Project in the New England District of New South Wales. Operated under a farm-in agreement with TechGen Metals Ltd, the campaign aims to inform upcoming RC drill targeting, with drilling expected to start in late June, subject to rig availability.