ASX 200 futures are pointing lower into the end of the week, down 67 points (-0.75%) at 8:30 am AEDT, after a sharp risk-off turn on Wall Street and an ugly late-session slide in commodities.
The local market did manage to push higher on Thursday — the ASX 200 added 0.32% to close at 9,043.5 — but the headline masked some pain under the surface. Small caps were hit hard (Small Ordinaries -1.76%), while tech and healthcare wore the brunt of an unforgiving session.
Offshore lead
US stocks rolled over into the close, with the S&P 500 down 1.57%, the Dow off 1.34% and the Nasdaq sliding 2.03% as traders again de-risked anything tied to high valuations and long-dated growth. The defensive rotation showed up clearly at a sector level — utilities and staples finished higher, while tech, energy and financials took the knocks.
The same story that’s been hanging over the market all month did the heavy lifting: investors are still questioning the size of big tech’s AI chequebook versus what it means for near-term cash flow. The Magnificent 7 cohort underperformed again, and the broader software sell-off continued.
What’s changed is where the anxiety is spreading. The market isn’t just repricing software and semis — it’s now trying to handicap which other parts of the economy could feel margin pressure as AI tools move from experiment to deployment. Overnight, that unease hit transport stocks particularly hard, and financial names were also under pressure on disruption fears.
Bond markets leaned into the risk-off tone. The US 10-year yield fell to about 4.10% as Treasuries caught a bid, while volatility jumped — the VIX pushed back above 21.
Back home
Thursday’s ASX lift was carried by the parts of the market that still have the numbers — and the investor base — to absorb a messy reporting season.
Financials were a clear bright spot, with the sector up 2.5%, led by ANZ (following a strong quarterly update) and CBA. Utilities also did heavy lifting, helped by Origin after upgrading its Energy Markets outlook.
But the rest of the board was far less friendly. Tech was slammed (the sector dropped more than 6%), and healthcare was hit even harder as CSL’s sell-off deepened and Pro Medicus was punished despite still-solid underlying growth — a reminder that this season is more about expectations and guidance than “good” results in isolation.
Small caps didn’t share in the index bounce either, which matters for today: when the market is already fragile under the surface, an offshore wobble tends to hit the higher-beta end first.
Commodities and currencies
Resources look set to start on the back foot after a broad, abrupt sell-off across key commodities in the early hours of the morning.
- Gold fell 3.3% to about US$4,917/oz, slipping back below the US$5,000 mark as the stronger risk-off bid didn’t translate into support for bullion.
- Copper dropped 3.3% to around US$5.77/lb, a sharp reversal that’s likely to weigh on miners after a more constructive tone earlier in the week.
- Oil was also hit, with WTI down 2.7% to ~US$62.89/bbl, as supply-demand concerns resurfaced alongside the broader deleveraging move.
- Crypto stayed in the firing line: Bitcoin fell 2.8% to about US$65,546, consistent with the wider pullback in risk appetite.
In FX, the Aussie eased 0.5% to ~US$0.7089, which can cushion local earners at the margin, but it’s unlikely to be the dominant driver if commodities and global equities stay under pressure.
Looking ahead
A few things are likely to shape how the session trades:
- Resources volatility: that overnight commodity air pocket is the big immediate risk for local materials names, particularly after the market has been leaning on miners at times to balance out tech weakness.
- Results season continues: there’s a busy local docket including Cochlear, Westpac, Nick Scali and GQG Partners — plenty of scope for stock-specific swings.
- US CPI ahead: the US inflation print lands at 12:00 am AEDT (early Saturday). With markets already jittery, a surprise either way could quickly reset rate-cut expectations — and with them, the mood toward tech, cyclicals and the Aussie dollar.
For today, the setup is fairly clear: the ASX is being asked to digest a tough offshore lead at the same time as results season keeps punishing anything that doesn’t clear the bar. If there’s a stabiliser, it’s likely to come from defensives and the banks again — but with commodities wobbling, the usual ballast from materials looks less reliable into the open.