ASX 200 futures are up 23 points (+0.25%) heading into Friday’s session, pointing to a modest rebound after the market edged lower on Thursday. Offshore leads were mixed overnight, with US equities clawing back from steep early losses as investors digested another sharp rotation away from software and into cyclicals, energy and select defensives.
Locally, yesterday’s trade again highlighted the market’s current fault lines: weakness in tech and lithium offset by continued strength in gold, copper and energy.
ASX wraps up slightly lower
The ASX 200 slipped 0.07% on Thursday, after spending much of the session under heavier pressure. Market breadth was weak, with most sectors finishing in the red, though materials and energy once again provided some ballast.
Technology was the clear drag, falling nearly 2% and hitting fresh multi-month lows as selling pressure continued in heavyweight names. That weakness flowed through to the broader growth complex, with the Small Ordinaries and Emerging Companies indices both underperforming.
In contrast, materials stocks pushed higher as metals momentum stayed firmly intact. Gold surged to fresh record territory above US$5,500/oz during the session, while copper futures jumped to new all-time highs, driving strong gains across copper-exposed producers.
Energy stocks also held firm, supported by rising oil prices and steady operational updates from the sector.
Stock-specific moves added to the divergence. The ASX itself surged after a broker upgrade, while lithium names sold off sharply following renewed weakness in Chinese spot pricing. Woodside’s quarterly update was broadly solid operationally, but softer forward production guidance tempered the share price response.
Wall Street: violent rotations, not outright risk-off
US markets were volatile overnight but finished well off their worst levels. The S&P 500 briefly fell more than 1.5% before paring losses to close slightly lower, while the Nasdaq lagged after another brutal session for software stocks.
The standout move was a sharp sell-off in Microsoft, which fell almost 10% after Azure cloud growth disappointed and investors baulked at another surge in AI-related capital spending.
That investor caution weighed heavily on software and application names, even as semiconductors and select hardware stocks held up better. Meanwhile, value-oriented sectors outperformed, suggesting capital is rotating rather than fleeing equities altogether.
Volatility spiked early but eased into the close, with markets stabilising as bond yields edged lower.
Commodities steal the spotlight
Commodity markets were anything but calm overnight, with sharp intraday swings across metals and energy.
- Gold finished slightly lower but traded in an exceptionally wide range, underscoring how crowded the trade has become after its near-vertical run.
- Copper surged more than 6%, posting its largest daily gain in over a decade as speculative flows and tight supply dynamics collided.
- Oil jumped more than 3%, pushing back above US$65/bbl, as geopolitical tensions involving Iran reintroduced a risk premium.
- Silver and uranium also saw heightened volatility, with sharp reversals after recent outsized gains.
Currency markets reflected the same cross-currents. The US dollar softened again, while the Aussie held above US70c, remaining highly sensitive to commodity price swings.
What to watch today
Today’s local calendar is relatively light on data, with focus shifting to company updates and offshore inflation signals later tonight.
Key things on the radar:
- Ongoing tech pressure: Software stocks remain under heavy global selling pressure, and that theme is likely to continue feeding into local sentiment.
- Commodity volatility: Gold and silver remain extremely sensitive to profit-taking, while copper’s surge is beginning to test conviction levels.
- Energy stocks: Oil’s sharp rally could support further upside if geopolitical risks remain elevated.
- Corporate updates: Quarterly reports continue to trickle through, with investors increasingly selective around guidance rather than headline numbers.
Tonight, attention turns offshore to US producer price data and European growth prints, which could shape expectations around central bank timing — a backdrop that’s becoming increasingly relevant again as markets reassess how long policy rates stay restrictive.