ASX 200 futures were down 24.7 points (-0.27%) at 9:45 am AEDT, pointing to a softer open after a jittery start to March dominated by Middle East escalation and sharp moves in oil and bond markets.
The local market held up reasonably well on Monday, but offshore trading suggests another choppy session ahead.
Wall Street steadies — but the oil shock is the story
US markets swung hard overnight. The S&P 500 fell more than 1% early before recovering to finish around flat (+0.4%), while the Nasdaq edged up 0.36% and the Dow slipped slightly. Small caps outperformed, with the Russell 2000 index up 0.85%, a sign the sell-off wasn’t broad-based by the close.
The trigger was crude, as traders focused on the Strait of Hormuz and broader risks to global energy supply after the joint US–Israeli strikes on Iran over the weekend and subsequent regional retaliation. Oil jumped sharply, then eased off its highs, but still closed the session significantly higher.
WTI ended around US$72 a barrel, up close to 7%, while Brent also rose more than 6%. Energy stocks benefited, while travel names and some consumer-facing sectors felt the pressure.
The bond market reaction was just as important. The US 10-year Treasury yield moved back above 4%, reversing last week’s slide below that level, as investors weighed what higher fuel costs could mean for inflation and the path of rate cuts. Volatility also picked up.
Gold rose above US$5,330 an ounce, reinforcing its safe-haven bid, while the US dollar strengthened and the Aussie dollar slipped back toward US70.9 cents.
The calmer close in the US didn’t translate across the board. European markets sold off heavily, with Germany’s DAX down more than 2% and the broader Euro Stoxx 50 also sharply weaker.
Asia was similarly soft: Japan and Hong Kong fell, while China managed a modest gain despite fresh signs of ongoing property weakness.
ASX recap: Energy and gold offset banks and tech
On Monday, the S&P/ASX 200 finished up 0.03% to 9,200.9 after a late recovery.
Energy led the winners as oil surged, with Woodside and Santos both climbing strongly and Karoon Energy up more than 15%. Gold miners also attracted support as bullion pushed higher.
Those gains were balanced by weakness in banks and tech, with Financials down 1.7% amid a risk-off tilt and the All Tech index down more than 2.5% in a clear reversal from last week’s stronger tone.
Travel stocks were hit hard. Qantas and Flight Centre fell sharply as investors priced in disruption risk and higher jet fuel costs, a familiar pressure point whenever crude spikes.
Meanwhile, defence-related names found support in the higher geopolitical risk backdrop, while Lynas rose after Malaysia renewed its operating licence through 2036.
Commodities: Big swings, mixed finish
Commodity volatility is now a feature, not a footnote. Oil and gold both traded sharply higher at points, then faded and rebounded again. Copper slipped, nickel fell, and silver swung from early gains to a steep decline by the end of the session.
Iron ore held around the US$100-a-tonne mark, while uranium exposure stood out overnight, with sector ETFs lifting strongly.
What to watch today
Locally, attention turns to RBA Governor Michele Bullock’s remarks at the AFR Business Summit, with investors looking for any guidance on how policymakers view energy-driven inflation risks. January dwelling approvals and the December quarter current account are due at 11:30am AEDT.
In corporate news, Rio Tinto has flagged progress on a Canada-backed gallium pilot plant at its Quebec alumina operations, targeting first output in 2027 as part of efforts to build a North American critical minerals supply chain.
With oil elevated and bond yields pushing back above 4% in the US, the ASX is likely to see further sector rotation rather than a broad directional move. Energy and gold remain supported, while rate-sensitive and travel-exposed names could stay under pressure.