ASX futures are down 0.2% to 8,547 points after Wall Street closed lower amid renewed volatility in AI-linked stocks.
The Australian sharemarket slipped on Wednesday, with the S&P/ASX 200 down 13.7 points, or 0.2%, to 8,585.2. Ten of 11 sectors finished lower, led by energy, as oil prices fell to their lowest level in almost five years.
Woodside dropped 2.4% to $23.40 after Brent crude slid 2.7% overnight to $US58.92 a barrel. Ampol fell 1.4% to $32.12, while Santos eased 1.2% to $6.04 after agreeing to divest its 42.86% operated interest in the Mahalo joint venture in Queensland’s Bowen Basin to Comet Ridge.
Defence stocks also retreated on speculation around a potential Ukraine ceasefire. DroneShield fell 12.1% to $2.47 as investors took profits following a sharp rally earlier in the week, while Austal tumbled 11.5% to $5.94.
US: AI wobble hits tech as Oracle slides
US equities fell sharply as a sell-off rippled through the technology sector. By late afternoon in New York, the Dow Jones was down 0.5%, the S&P 500 had fallen 1.2% and the Nasdaq shed nearly 2%.
Oracle shares dropped more than 5% after reports that Blue Owl Capital withdrew from a proposed $US10bn AI data centre investment involving OpenAI. Talks reportedly collapsed over the scale of the 1-gigawatt project. Oracle stock is now down more than 41% over the past three months.
Other AI-linked names followed lower, with Nvidia down 3.8% and Broadcom off 5.4%. Tesla slid 5% after Californian regulators gave the EV maker 90 days to amend advertising practices deemed misleading, although the stock remains up nearly 20% from its November low.
US labour data showed the unemployment rate rising to 4.6% from 4.4%, but economists said the figures were not weak enough to prompt near-term rate cuts. Bond markets are pricing in around a 20% chance of a Federal Reserve cut in January.
In contrast, medical supplier Medline surged 42% in its trading debut after raising $US6.26bn in the largest US IPO since 2021.
Europe: ECB rate-hike bets ease
Eurozone bond yields declined as investors scaled back expectations of future European Central Bank rate hikes ahead of Thursday’s policy meeting.
Markets had reacted sharply last week after ECB board member Isabel Schnabel suggested the next policy move could be a hike rather than a cut. However, analysts said those comments may not reflect the broader ECB view, particularly as risks from a strong euro and Chinese trade pressures could prove deflationary.
Money markets now price about a 15% chance of a tightening move by December next year and a 35% probability by March 2027, down from more than 50% last week. The ECB deposit rate currently sits at 2%.
Currencies: Aussie dollar under pressure
The Australian dollar fell 0.4% to US66.04¢, tracking the weaker risk backdrop. Bitcoin slid 2.1% to $US85,795, remaining below the $US87,000 level.
Commodities: Oil rebounds, precious metals surge
- Oil prices rebounded after US President Donald Trump ordered a blockade of sanctioned tankers entering and leaving Venezuela. Brent crude rose about 1.5% to around $US59.78 a barrel after hitting 5-year lows a session earlier.
- Gold climbed 0.8% to $US4,336.48 an ounce, while silver jumped 5.3% to $US66.44 an ounce, continuing its run toward record levels.
- Iron ore rose 1% to $US103.60 a tonne.