The Australian sharemarket is set to open lower on Wednesday after Wall Street declined and hopes faded for a breakthrough in the US-Iran standoff over the Strait of Hormuz.
ASX futures were pointing to a 37-point, or 0.4%, fall at the open as of 6am.
Investors will also have a busy domestic reporting calendar to digest, with results due from Commonwealth Bank, Seek, Suncorp, Computershare, AGL and Arena REIT.
In the US, attention will turn to July Consumer Price Index data, which could influence expectations for the Federal Reserve’s next move on interest rates.
ASX closes higher after RBA decision
The S&P/ASX 200 finished Tuesday 18 points, or 0.2%, higher at 9,250.60 after the Reserve Bank of Australia left the official cash rate unchanged at 4.35%.
Energy stocks led the gains as oil prices remained elevated amid continued uncertainty over the Strait of Hormuz, while 6 of the ASX 200’s 11 sectors ended in negative territory.
The RBA’s decision was broadly in line with expectations as the central bank weighs signs of slowing economic activity against the risk that inflation remains too high.
The market briefly strengthened after the decision before giving back some gains after the RBA reiterated that inflation remained above its preferred level.
Financial markets are now pricing roughly a 50% chance of another rate increase later in 2026, while expectations for rate relief have been pushed into the second half of 2027.
Energy was the strongest area of the market, with Woodside Energy Group Ltd (ASX:WDS, LSE:WDS, OTC:WOPEF) gaining 3.8% and Santos Ltd (ASX:STO) rising 5.4%.
Brent crude traded near US$88 a barrel after gaining 5% in the previous session, while West Texas Intermediate held above US$82.
Tensions remain elevated after Iran outlined conditions it wants met before allowing unrestricted shipping through the Strait of Hormuz, including reparations linked to the conflict.
The uncertainty also lifted refiners, with Ampol Ltd gaining 3.4% and Viva Energy Group Ltd rising 2.3%.
Coal producers also advanced, with Yancoal Australia Ltd (ASX:YAL) up 2.8% and Whitehaven Coal Ltd gaining 2.5%, amid expectations that prolonged disruption to oil supplies could support demand for alternative energy sources.
Mining stocks were moderately higher. BHP Group Ltd (LSE:BHP, ASX:BHP) gained 0.7%, Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) added 0.5% and Fortescue Ltd (ASX:FMG) rose 0.2%.
Gold stocks were mixed despite bullion reaching a 2-month high above US$4,400 an ounce. Northern Star Resources Ltd (ASX:NST) fell 0.9%, Evolution Mining Ltd (ASX:EVN) gained 0.7% and Newmont Corp rose 2.8%.
Higher oil prices weighed on fuel-intensive businesses, with Qantas Airways (ASX:QAN) Ltd falling 3.2% and Virgin Australia declining 2.5%.
Financial stocks were also mostly weaker. Commonwealth Bank of Australia (ASX:CBA) slipped 0.2% and ANZ Group Holdings Ltd fell 1.3%, while Westpac Banking Corp finished flat and National Australia Bank Ltd edged 0.2% higher.
Among companies reporting results, Southern Cross Media finished 0.9% lower after announcing a $13 million loss for the 2025 financial year as revenue declined across television, newspapers and radio.
SGH Ltd, which holds a 20.1% stake in Southern Cross Media, dropped 10.3% after reporting that net profit had stalled at $920 million.
Life360 Inc weighed heavily on the technology sector, tumbling 19.4%. June-quarter revenue increased 38% to US$159 million, but operating expenses rose 43%, contributing to a fall in quarterly net profit to US$5.1 million from US$7 million a year earlier.
US markets fall as Iran concerns weigh
US sharemarkets closed lower as investors became more pessimistic about the prospects of an agreement that could restore stability to the Middle East and ease pressure on global energy markets.
The Dow Jones Industrial Average fell 0.3%, the S&P 500 declined 0.3% and the Nasdaq Composite lost 0.6%.
Amazon fell 2.1%, Alphabet dropped 3.6% and SpaceX declined 3.9%.
Alternative asset managers were among the stronger performers, with Apollo Global Management (NYSE:APO) jumping 6.3% and Blackstone rising 3.9%.
The companies were among financial institutions that recently partnered with Nvidia on compute-financing platforms aimed at mobilising more than US$500 billion. Nvidia finished close to flat.
Dell Technologies fell 3.7% following a broker downgrade, while Rocket Lab was steady after appearing to push back the timeline for the first flight of its Neutron rocket.
US-listed shares in sportswear group On dropped 20% after sales missed estimates, while LNG company Venture Global fell 7% after second-quarter revenue came in slightly below expectations.
US Treasury yields were mixed ahead of the July inflation report. The 10-year Treasury yield was steady at 4.70%, while the 2-year yield eased 1 basis point to 4.22%.
European markets pause near record highs
European sharemarkets were little changed near record levels as a generally positive earnings season was offset by caution over energy supply risks linked to the Strait of Hormuz.
The continent-wide FTSEurofirst 300 index finished flat, while the UK FTSE 100 slipped 0.2%.
Energy stocks gained 1.7% and technology shares rose 1.1%.
Swiss-American eye-care company Alcon added 4.7% after lifting its full-year earnings forecast, while Danish facilities management group ISS gained 4.4% following better-than-expected half-year results.
Insurance stocks underperformed, falling 1%, with Legal & General declining 3.1% after a broker downgrade.
Currencies mixed
Major currencies were mixed against the US dollar.
- The euro was steady at US$1.1539.
- The Japanese yen was little changed at ¥159.36.
- The Australian dollar gained 0.1% to US70.59 cents.
Commodities strengthen as supply concerns persist
Oil prices continued to rise as markets reduced expectations of a near-term peace agreement involving Iran.
- Brent crude futures settled 1.4% higher at US$88.91 a barrel.
Base metals were also stronger.
- Copper futures gained 0.3% to fresh highs as markets assessed the impact of the Democratic Republic of Congo’s ban on copper and cobalt exports.
- Aluminium futures climbed 1.4% to a 7-week high, supported by concerns over Gulf supply and Norsk Hydro’s announcement that it would reduce feedstock production at its Brazilian operations.
- Gold futures gained 0.5% to settle at US$4,441 an ounce as investors positioned ahead of US inflation figures that could shape expectations for Federal Reserve monetary policy.
- Iron ore futures rose 0.6% to US$95.08 a tonne, supported by tighter near-term supply and higher freight costs as elevated oil prices increased shipping expenses.