United States
Wall Street retreated overnight as renewed trade tensions rattled investors. The S&P 500 dropped 0.8%, the Nasdaq 100 fell 0.8%, and the Dow Jones Industrial Average shed 0.9%, led by a sharp pullback in megacap stocks. Tesla tumbled nearly 7% following Elon Musk’s announcement of a new political party, fuelling concerns about his focus on the struggling EV maker.
Market sentiment soured further after President Donald Trump unveiled a fresh round of tariff plans targeting key US trading partners. From August, new levies of up to 25% will hit goods from countries including Japan, South Korea, Malaysia, and South Africa. Emerging market currencies slumped in response, with the South African rand falling 1.5% and the Korean won down 1.1%.
US Treasury yields climbed, with the 10-year yield up 3.4 basis points to 4.38%, as investors digested the inflationary implications of higher tariffs. The Federal Reserve remains cautious, watching how trade policy may impact growth. Minutes from the Fed’s June policy meeting are due Wednesday.
In corporate news, Apple appealed a €500 million EU fine over its App Store, while CoreWeave is acquiring Core Scientific for USD 9 billion to bolster its AI infrastructure. Netflix and Applied Materials were both downgraded on valuation and growth concerns, respectively.
Europe
European markets closed modestly higher, showing resilience amid mounting global trade tensions. The Stoxx Europe 600 Index rose 0.4%, supported by gains in banking and technology stocks. French lender Societe Generale led the charge, climbing 2.8% after receiving bullish commentary from analysts at Barclays and Bank of America ahead of its earnings release. Technology stocks also advanced, reflecting investor appetite for quality sectors amid uncertainty.
However, energy shares lagged behind. Shell Plc dragged on the broader index following a weaker-than-expected trading update, raising concerns about second-quarter earnings across the sector. Medtech stocks also faced pressure after China retaliated against EU-imposed restrictions on its medical device manufacturers. Although losses in the sector were later pared, the move added a layer of geopolitical risk ahead of a high-stakes EU-China summit later this month.
Adding to the uncertain backdrop, US President Donald Trump announced that letters outlining new tariff rates would be sent out to about a dozen countries starting Monday. Though the European Union is not currently on the list, it remains in active negotiations to lock in a 10% tariff rate by the 1 August deadline, aiming to secure more favourable trade terms and avoid deeper levies.
Looking ahead, European markets are also beginning to shift focus to the upcoming second-quarter earnings season. Analysts expect a more complex reporting period, as this will be the first quarter where the early effects of tariff policies may start to appear in corporate earnings and guidance.
Australia
Australian shares are set to open lower on Tuesday, with ASX futures down 47 points or 0.6% to 8526, reflecting the sharp decline in US equities overnight and mounting global trade tensions. On Monday, the S&P/ASX 200 fell 13.7 points, or 0.2%, to close at 8589.3, after fluctuating between gains and losses throughout the session. The broader All Ordinaries index mirrored the decline, settling at 8826.4. Six of the 11 major sectors ended in the red, led by materials and energy.
The local market was weighed down by growing concerns over US President Donald Trump’s tariff plans, with his administration confirming letters had been sent to up to 15 countries outlining new levies, effective from 1 August. Australia is not directly targeted, but the escalation of global trade conflict has triggered risk aversion among investors. US futures continued to trend lower in early Asian trading.
At home, attention is now sharply focused on the Reserve Bank of Australia’s policy decision later today. The RBA is widely expected to cut the cash rate by 25 basis points, reducing it from 3.85% to 3.6%. If confirmed, it would mark the first back-to-back cut since the COVID-19 era. Bond markets have fully priced in the move, and 32 out of 36 economists surveyed by the Australian Financial Review agree with that outlook.
Today’s economic calendar also features NAB’s June survey of business confidence and conditions, scheduled for release at 11:30am. Traders will be watching closely for signs of weakening sentiment or inflationary pressures.
Locally, gold miner Northern Star Resources dropped 8.7% to $16.80 after warning investors of higher production costs and lower output expectations for FY26. The materials sector declined 0.9% as iron ore futures slipped 0.5% to USD 95.35/tonne. Heavyweights BHP and Rio Tinto both edged lower, down 0.3% and 0.2% respectively.
Among corporate standouts, Origin Energy jumped 6.8% to $11.55 following reports that UK-based Octopus Energy, of which Origin owns a 23% stake, may spin off its technology platform Kraken. HUB24 gained 2.8% after a UBS upgrade, setting a short-term price target of $105. Meanwhile, Cobram Estate Olives soared 13.5% to $2.44 — a record close — after reporting a strong 2025 harvest.
Commodities
Commodities markets were mixed as investors weighed the impact of heightened trade tensions and shifting supply expectations. Oil prices rose after Saudi Arabia raised its official selling price for crude to Asia, reflecting confidence in demand resilience despite recent volatility. Brent crude rose 1.8% to USD 69.56 a barrel, while West Texas Intermediate (WTI) gained 1.5% to USD 67.99.
Gold was little changed at USD 3336.50 an ounce, but remains sensitive to geopolitical headlines. Earlier in the session, prices dipped as much as 0.9% on the back of President Trump’s tariff threats, though losses were later pared. In Australia, gold-linked equities faced selling pressure, with the sector overall underperforming.
Iron ore continued its downward drift, slipping 0.6% to USD 95.25 a tonne on softer demand signals from China and nervousness around broader trade disruptions. Copper and aluminium also declined, as the threat of a 10% US tariff on BRICS-aligned countries raised concerns about future global demand for industrial metals.
In currency markets, the US dollar strengthened, with the Bloomberg Dollar Spot Index up 0.5%. The Australian dollar fell 1% to US64.91¢, weighed down by interest rate expectations and weaker risk appetite. The euro dropped 0.5% to USD 1.1719, and the British pound slid 0.3% to USD 1.3609. The Japanese yen declined 1.1% to 146.06 per dollar, while emerging market currencies bore the brunt of the selloff — notably the South African rand, which dropped 1.5%, and the Korean won, down 1.1%.
Cryptocurrencies edged lower, with Bitcoin falling 0.74% to USD 107,900 and Ether down 0.49% to USD 2,534. Traders remain cautious in the digital asset space amid renewed global regulatory scrutiny and broader market volatility.
Economic Calendar
AU:
- NAB Business Confience (Jun) 11:30
- RBA Rate Decision 14:30
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
