Australian shares are poised to open sharply lower, with futures indicating a fall of 152 points, or 1.7%, to 8746, as a faltering Wall Street rally and renewed uncertainty around US-Iran relations weigh on sentiment.
The local market had rallied in the previous session, with the S&P/ASX 200 closing up 84.5 points at 8878.10, marking a second straight day of gains as investors responded to optimism around a potential US-Iran peace agreement.
Seven of 11 sectors finished higher, led by materials, which climbed 3.7%. Major miners BHP, Rio Tinto and Fortescue each gained about 3% as iron ore futures topped US$111 a tonne for the first time since October 2024.
Gold stocks also advanced, tracking strength in bullion prices. Newmont rose 2.8% to $160.10, Evolution Mining added 6.3% to $13.10 and Northern Star gained 4.4% to $21.70.
The banks were firmer, with Commonwealth Bank up 0.7% to $179.23, ANZ rising 0.8% to $37.35 and Westpac lifting 1% to $39.34. National Australia Bank slipped 1.3% to $39.51 after trading ex-dividend.
Energy stocks lagged as oil prices softened, with Woodside down 4.1% to $22.42 and Santos falling 3.3% to $7.63. Viva Energy dropped 5.1% to $2.25 following a director share sale, while Ampol lost 2.3% to $34.22.
Wall Street pulls back from record highs
US markets ended lower, retreating from earlier record levels as a pullback in chipmakers and doubts over a Middle East peace deal weighed on sentiment.
The Dow Jones fell 0.6%, the S&P 500 lost 0.4% after briefly hitting a fresh record high, and the Nasdaq slipped 0.1%. Materials and energy stocks led declines across nine of the 11 S&P sectors.
Semiconductor stocks eased, with the index down 0.7%, while Arm Holdings dropped 10% on supply concerns despite strong earnings guidance.
In contrast, cybersecurity stocks rallied after upbeat forecasts from Datadog, which surged 30%, lifting peers CrowdStrike and Palo Alto Networks.
US economic data showed initial jobless claims rose by 10,000 to 200,000 last week, pointing to continued resilience in the labour market.
Europe weakens after prior rally
European markets retreated after a strong prior session, as investors reassessed progress towards a US-Iran agreement.
The FTSEurofirst 300 index fell 1.1%, while the UK’s FTSE 100 dropped 1.6%.
Campari tumbled 14.5% after missing revenue expectations, dragging peers Diageo and Pernod Ricard lower. Defence stocks also declined, with Rheinmetall down 6.9%.
Henkel was among the gainers, rising 3.3% after meeting sales forecasts.
Currencies soften against stronger US dollar
Major currencies weakened against the US dollar.
- The euro fell 0.2% to US$1.1729.
- The yen dropped 0.3% to 156.92 per dollar.
- The Australian dollar eased 0.4% to US72.08 cents after recently hitting a four-year high.
Commodities volatile amid geopolitical uncertainty
Oil prices remained volatile, initially easing before recovering as tensions in the Strait of Hormuz persisted.
- Brent crude settled down 1.2% at US$100.06 a barrel but moved higher in late trade following reports of renewed conflict.
Middle East tensions remain a key driver, with analysts warning that ongoing close-proximity interactions between US and Iranian forces could escalate without a diplomatic breakthrough.
- Gold slipped back below US$4700 an ounce after earlier gains, while base metals were softer, with copper down 0.1% and aluminium off 0.5%.
- Iron ore edged higher, rising 0.1% to US$110.95 a tonne.
Outlook
Investors will be watching earnings updates from Macquarie Group, QBE, REA Group and News Corp locally.
In the US, April unemployment data is due, with the jobless rate expected to hold at 4.3%.