Australian shares are set for a quiet open after Wall Street finally paused its weeklong rally, weighed down by fresh scrutiny of the AI trade and renewed concerns over stretched valuations. ASX 200 futures were flat (-1 point) at 8:30 am AEDT, following Monday’s mixed local session where small-caps once again outperformed a softer large-cap index.
Wall Street cools as AI bubble talk returns
US markets eased overnight, ending a seven-day winning streak for the S&P 500, which fell 0.4%. The Nasdaq dropped 0.7%, and the Dow shed 0.2% as profit-taking set in after last week’s record highs.
Technology stocks led the pullback after a report suggested Oracle’s cloud margins were far thinner than investors hoped, fuelling chatter that the AI boom may be running too hot. Tesla also slipped after unveiling lower-priced versions of its Model 3 and Y to offset the loss of EV tax credits.
Defensive names held firm — consumer staples, utilities and energy all finished higher — while bond yields eased amid persistent uncertainty from Washington’s government shutdown. The US 10-year Treasury yield edged down to 4.13%, and the dollar strengthened on safe-haven flows.
Commodities continued to flash strength, with gold futures briefly topping US$4,000 an ounce and copper climbing 0.8% to US$5.04 a pound. Aluminium prices jumped 1% after a fire at Novelis’s New York plant disrupted US auto supply chains.
ASX recap: Small-cap rally rolls on
The S&P/ASX 200 slipped 0.27% on Monday to 8,956.8 points, as losses in consumer and communication names offset mild gains in materials. The broader All Ordinaries also eased 0.28%, while the Small Ordinaries rose 0.12%, extending a run that has seen micro-caps steadily outperform their blue-chip peers.
Technology and consumer discretionary were the day’s laggards, each down more than 1%, while materials and utilities managed to hold flat. Energy stocks eased 0.5% as oil prices consolidated after recent volatility.
Commodities and currencies
Gold traded near US$3,981 an ounce (+0.5%), and copper extended gains to US$10,087 a tonne. Aluminium reached its highest level since May 2024 at US$2,710 a tonne, while oil was little changed (WTI US$62.02, Brent US$65.74). Iron ore hovered at US$104.22 a tonne as China’s week-long holiday kept volumes subdued.
The Australian dollar is steady around US$0.658, while Bitcoin eased 2% to about US$122,000 after its recent surge above US$123,000.
What’s on today
It’s another light session for local data, with the RBA’s Annual Report due and few major economic releases scheduled. The Reserve Bank of New Zealand hands down its rate decision today, with markets split between a 25- and 50-basis-point cut.
Transurban (ASX:TCL) holds its AGM and will release quarterly traffic results, while Green & Gold Minerals (ASX:GG1) lists at 11 am AEDT. James Hardie (ASX:JHX) is likely to draw attention after guiding Q2 earnings well above consensus.
Dividend payments today include Brambles, New Hope and NRW Holdings, while Vulcan Steel trades ex-dividend.