Australian shares were poised to open lower this morning, with ASX futures down 31 points (0.38%) at 8:30 am AEST. However, the S&P/ASX200 is up 4.90 points today to 8,156.30 – a small gain, but a lift nonetheless.
This follows a mixed overnight session on Wall Street, where major indices continued their pullback from a recent nine-day rise.
Local market preview
With the ASX 200 opening lower on Wall Street’s negative lead, investors will be closely watching for domestic economic data releases and corporate earnings reports for further insights into the health of the global economy.
In corporate news, positive earnings updates from AUB Group, JB Hi-Fi and Temple & Webster may provide some support to the local market. However, ongoing macroeconomic uncertainties and global market volatility are likely to weigh on investor sentiment.
Australian sectors are likely to follow the broadly negative sector performance from the US, where health care (-2.76%), industrials (-0.85%) and consumer discretionary (-0.85%) led declines. Utilities (+1.23%) and energy (+0.10%) were among the few US sectors to post gains.
Domestically, technology and consumer discretionary stocks are likewise facing headwinds. Markets have exhibited a defensive tilt this week, with utilities, staples and telcos outperforming on a relative basis. Meanwhile, gold miners may see upside amid the surge in gold prices.
On the small cap front, the S&P/ASX Small Ordinaries (XSO) is 0.84% higher as we head into midday. Over the past five days, the index has gained 2.09%.
Also on the ASX today:
- National Australia Bank reports first-half cash earnings are up 1%, stable net interest margins and an interim dividend of 85 cents per share
- Auckland International Airport affirms underlying profits for fiscal year 2025
- Aurizon issues a trading update noting the appointment of administrators for Cenetrex and OneSteel manufacturing and reaffirming EBIDTA guidance
- Wesfarmers seeks to sell a $300 million portfolio of Bunnings Warehouses
Wall Street reverses course as yields climb
US markets experienced a volatile session, with the S&P 500 and Nasdaq Composite retreating from early gains to close lower on renewed uncertainty around trade deals. The S&P 500 fell 0.77% from its session highs, while the Nasdaq declined 0.9%. The Dow Jones Industrial Average also ended in negative territory, down 0.95%.
Meanwhile, US government bond yields fell as strong auction demand for the benchmark 10-year note boosted maturities across the curve. After the US Treasury sold $42 billion of 10-year notes at a 4.342% yield, dropping the yield to 4.3%, while the 2-year Treasury yield fell 6 points to 3.78%.
However, mixed messages from US President Donald Trump and Treasury Secretary Scott Bessent about potential trade deals were credited with ending markets’ recent run of recovery from post-‘Liberation Day’ declines. Health care stocks fell 2.8% on Trump’s plan to announce pharmaceutical tariffs in the coming weeks.
Tech stocks also suffered, with Palantir Technologies shares falling 12.1% after the data analytics firm slightly beat revenue forecasts and reported in-line profit. Tesla fell 1.8% on slumping new car sales in Britain and Germany.
The CBOE Volatility Index (VIX), often referred to as Wall Street’s ‘fear gauge’, rose nearly 5% to 24.76, indicating increased market uncertainty.
Mixed results in Europe
European share markets closed mixed on Tuesday, with political developments in Germany weighing on sentiment.
Germany’s main share index ended the session down 0.4%, having earlier fallen as much as 2.0% following a surprise parliamentary setback for conservative leader Friedrich Merz and his alliance with the centre-left Social Democrats. However, Merz was later confirmed as German chancellor in a second parliamentary vote, helping markets pare losses.
European health care stocks declined 1.1%, contributing to broader weakness. The pan-European FTSEurofirst 300 index slipped 0.3%, while London’s FTSE 100 index edged modestly higher by the close.
Gold surges, oil edges higher
Tariff concerns also contributed to a 3% jump in gold futures, which reached US$3,422.80 an ounce, with spot gold increasing 2.12% to US$3,405.11 an ounce.
Base metal prices also increased, with copper futures up 1.7% and aluminium up 0.2%. Iron ore futures rose 1.3% to US$98.63 per tonne, boosted by hopes of easing trade tensions between the US and China, despite weak Chinese economic data.
The commodities market also saw oil trading slightly higher, with WTI crude up 3.43% to US$59.09 a barrel, on signs that European and Chinese demand will increase and as Middle East tensions continue.
The commodities boost was in part driven by gains against the US dollar in European and US trade, with the euro, yen and Australian dollar all rising. The Australian dollar strengthened slightly to US64.92 cents.