Australian shares are set to tumble at the open after global markets were rattled by a fresh escalation in US–China trade tensions over the weekend. ASX 200 futures were down 84 points (-0.9%) at 8:30 am AEDT, pointing to a steep drop when trading resumes.
The selloff follows Wall Street’s worst session since April, after US President Donald Trump threatened to impose 100% tariffs on Chinese imports and later confirmed the plan after the New York close. The move came in response to Beijing tightening restrictions on rare earth exports and imposing new port fees on US vessels — reigniting fears of a prolonged trade war and spooking investors already uneasy about valuations and the ongoing US government shutdown.
Wall Street rocked by tariff shock
The S&P 500 plunged 2.7%, the Nasdaq tumbled 3.6% and the Dow fell 1.9%, erasing weekly gains and triggering the first significant volatility spike in months. Technology and growth stocks bore the brunt of the selloff, with Nvidia, Tesla, and Amazon sliding more than 5% apiece as investors reassessed the sector’s exposure to new trade restrictions. The semiconductor index slumped more than 6%.
Defensive sectors such as consumer staples and utilities fared better, while bond yields fell and gold rallied as traders sought safe-haven assets. The VIX volatility index jumped more than 30% to above 21 — its highest since early April.
Gold climbed above US$4,015 an ounce, while copper and oil both sank more than 4%. The Aussie dollar briefly dipped below US$0.65 before recovering, while Bitcoin surged 4.6%, as some investors rotated out of traditional assets.
ASX recap: Tech and materials diverge
Back home, the S&P/ASX 200 fell 0.13% on Friday to 8,958.3 points, marking a subdued finish after a volatile week. Technology led gains with a 1.1% rise, while consumer discretionary and healthcare also edged higher. However, the materials index slumped 2.1% as gold miners gave back recent gains following their stellar September run.
Energy and real estate stocks also weakened, and small caps lost ground, with the Small Ordinaries index down 0.55%.
Commodities and currencies
Gold prices surged as investors fled to safety, while silver climbed 1.6%. Copper slid over 6% and lithium stocks dropped nearly 9%, reflecting concerns that renewed tariffs could hit global manufacturing demand. Oil prices fell to five-month lows, with Brent settling near US$62.70 a barrel.
Iron ore managed a modest rise to US$105.74 a tonne, and uranium extended gains. The Australian dollar last traded around US$0.65, steady after a volatile overnight session.
What’s on today
The local market faces a risk-off start to the week, with gold and defensives likely to find early support as investors rotate out of tech and energy. Heavyweights in the resources sector could face pressure today after the sharp falls in global commodities.
On the corporate front, Caterpillar’s $5-per-share takeover of RPMGlobal (ASX:RUL) will dominate headlines, alongside updates from Fletcher Building and Ventia Services, which secured a $935 million Australian Defence Force contract.
Data-wise, focus turns to China’s September trade balance, due at 1 pm AEDT, while tariff developments and US bank earnings season loom large later in the week.