The ASX is set to edge lower on Monday, with futures down 6.6 points (-0.07%) at 9:40 am AEST, as Friday’s tech-driven push to fresh highs on Wall Street fails to translate into broader market strength.
The cautious lead follows a volatile week for local markets, with the S&P/ASX 200 finishing Friday up 0.74% — snapping an extended losing streak — but still ending the week slightly in the red.
Wall Street hits records, but breadth tells a different story
US markets delivered another mixed performance to close out the week, with the S&P 500 rising 0.29% and the Nasdaq gaining 0.89% to notch fresh record highs, while the Dow Jones slipped 0.31%.
The gains were again concentrated in large-cap technology names, with strong earnings and ongoing demand linked to artificial intelligence continuing to drive investor interest.
Outside of that cohort, the picture was less convincing. Most sectors finished lower, and equal-weight indices lagged, pointing to a market that is advancing on a narrower base rather than broad participation.
That dynamic has become a defining feature of the current rally, with investors increasingly selective about where they deploy capital.
Oil eases, but energy remains central to outlook
Oil prices pulled back into the end of last week, with WTI crude dropping around 3% to just above US$101 a barrel, though prices remain elevated after a sharp multi-week run.
The easing followed signs of tentative diplomatic movement, with Iran submitting a fresh proposal aimed at de-escalating tensions, even as US officials signalled scepticism about its viability. Trump also announced a plan for US Naval escorts to begin in the Strait of Hormuz from Monday.
At the same time, supply-side developments continue to evolve. OPEC+ has agreed to a modest production increase from June, while US crude exports have surged to record levels as the conflict reshapes global flows.
Despite the pullback, energy remains a key swing factor for markets, given its direct link to inflation and monetary policy expectations.
Commodities and currencies
Commodity markets were mixed heading into the new week.
- Crude eased but held above US$100 a barrel after recent volatility
- Gold drifted slightly lower to around US$4,610/oz as yields stabilised
- Copper edged higher, reflecting a more neutral tone on growth
The overall picture suggests a market still balancing competing forces — softer energy prices on one hand, but ongoing uncertainty around supply and demand on the other.
Currency markets were relatively steady. The Australian dollar held around US$0.72, while the US dollar firmed modestly as investors sought stability amid geopolitical uncertainty.
Bond yields were little changed, with the US 10-year yield near 4.38%, while volatility ticked slightly higher, with the VIX hovering just below 17.
ASX rebounds but weekly losses linger
Locally, Friday’s session saw the ASX 200 stage a broad-based recovery, with 10 of 11 sectors finishing higher and materials leading the charge.
The rebound was driven in part by strength across resource stocks, as investors rotated back into gold, lithium and uranium names following recent weakness.
Even so, the bounce was not enough to offset earlier declines, leaving the index down modestly for the week and highlighting the uneven nature of recent trading.
Financials lagged during the session, while energy stocks were more subdued despite elevated oil prices, pointing to a market still adjusting to shifting macro conditions.
What’s happening today
The week ahead is shaping as a key one for both markets and policy expectations.
- RBA meeting (Tuesday): Markets are now questioning whether the central bank will deliver another rate hike after inflation surged to 4.6%
- Global data: US jobs data later in the week will be closely watched for signals on the Fed’s next move
- Energy and geopolitics: Developments in US–Iran talks and oil markets remain critical
There are also a handful of local updates in focus, including NAB’s interim results, which beat expectations on earnings and margins.
After a period of heightened volatility, markets are entering a more finely balanced phase. Strong earnings and structural growth themes continue to provide support, but narrowing leadership, elevated energy prices and policy uncertainty are making the outlook less straightforward.