The ASX is set for a weaker open on Tuesday, with futures down about 36 points (-0.41%) at 9:45 am AEST, as a narrow tech-led rally on Wall Street fails to offset broader weakness across global markets.
The cautious lead follows a fifth straight day of losses for the S&P/ASX 200, which slipped 0.23% on Monday as selling pressure persisted across most sectors despite pockets of strength in materials.
Wall Street edges higher, but breadth weakens
US markets delivered a mixed session overnight, with the S&P 500 and Nasdaq both nudging to fresh record highs, rising 0.12% and 0.20% respectively, while the Dow Jones slipped slightly (-0.13%). Gains were largely concentrated in a handful of large-cap technology names, with Nvidia again hitting record levels, while the equal-weight S&P 500 slipped and several sectors moved lower.
Consumer staples, real estate and discretionary stocks all came under pressure, suggesting the broader market is struggling to maintain momentum even as headline indices grind higher.
The session reflected a market holding steady ahead of a major week for earnings and central bank decisions, rather than one building fresh upside.
Oil and geopolitics remain key swing factors
Energy markets and geopolitical developments continue to shape the broader outlook.
Oil prices pushed higher again, with WTI crude rising above US$96 a barrel, extending a multi-day rally driven by ongoing supply concerns and stalled negotiations between the US and Iran.
A new proposal from Iran to reopen the Strait of Hormuz in exchange for easing US restrictions has so far failed to gain traction, with US officials rejecting the terms and uncertainty lingering over the next steps.
That backdrop is keeping markets on edge, with investors weighing the risk of prolonged supply disruption against the potential for a diplomatic breakthrough.
Commodities and currencies
Commodity markets continue to send mixed signals.
- Crude pushed higher, with WTI above US$96 a barrel and Brent above US$108
- Gold eased slightly, drifting below US$4,700/oz as yields pushed higher
- Copper was little changed, reflecting a more neutral stance on growth
The divergence highlights a market still balancing inflation risks from energy with a more uncertain outlook for industrial demand.
Currency markets were relatively steady. The Australian dollar hovered near US$0.719, supported by firm commodity prices and expectations of further policy tightening locally.
Bond yields edged higher again, with the US 10-year yield rising to around 4.34%, while volatility eased slightly, with the VIX slipping toward 18.
ASX extends losing streak despite pockets of strength
Locally, Monday’s session saw the ASX 200 notch a fifth consecutive decline, though the pullback remained relatively modest at the index level.
Performance across sectors was uneven. Materials provided some support, while utilities, energy and technology stocks were among the weakest performers.
The divergence reflects a market still searching for direction, with rising oil prices and shifting rate expectations creating a more challenging backdrop for risk assets.
Among notable moves:
- Gold stocks rallied strongly as investors rotated towards defensive exposures
- Lithium names found some support on improving pricing trends
- Origin Energy fell sharply, down more than 5%, following a weaker quarterly update
- The overall tone remains cautious, with gains narrowly concentrated and broader participation limited.
What to watch today
With a heavy global calendar ahead, markets are likely to remain headline-driven in the near term.
- Central banks: Policy decisions from the Fed, ECB, Bank of England and Bank of Japan this week will be closely watched
- Earnings: A wave of megacap tech results is set to test the strength of the current rally
- Geopolitics: Any progress — or further breakdown — in US–Iran talks could quickly shift sentiment
Locally, attention will also turn to tomorrow’s inflation data, which is expected to play a key role in shaping expectations ahead of next week’s RBA meeting.
After a prolonged run higher in global equities, the market is showing signs of fatigue. With leadership narrowing and macro risks still unresolved, the next phase may depend less on momentum and more on how investors respond to incoming data and policy signals.