Geopolitics is once again setting the tone for global markets, with the deepening conflict between the United States and Iran keeping oil elevated and investors on the defensive. Wall Street spent Monday's session grinding lower as traders weighed truce proposals against fresh threats to Middle East shipping, and the caution looks set to wash onto our shores this morning. ASX 200 futures are pointing down 36 points, or 0.4%, to 8,717.
United States
All three major US benchmarks closed in the red, with the S&P 500 down 0.2% to 7,443.28, the Dow off 0.6% to 51,839.26 and the Nasdaq slipping 0.05%. Eight of the S&P 500’s 11 sectors fell, paced by health care, while early gains in energy, information technology and communications services faded as the session wore on.
The pressure came from oil, which briefly topped US$89 a barrel as US forces launched a tenth straight day of strikes on Iranian targets. President Donald Trump vowed Tehran will pay for the deaths of three American soldiers, even as mediators floated a proposed 10 day ceasefire. Yemen’s Houthi militants added to supply concerns by threatening a maritime blockade of Saudi Arabia in the Red Sea, prompting Riyadh to pledge it would take all necessary measures to protect its ships. Worries that higher energy costs could reignite inflation pushed the 10 year Treasury yield up 4 basis points to 4.59%, with the move compounded by a selloff in UK gilts.
Among individual names, Alphabet gained 1.5% on a Bloomberg report the company is developing a server chip designed to optimise its Gemini artificial intelligence model, while Iren surged 20% after announcing new contracts and lifting a key revenue metric. Attention now turns to earnings, with Tesla and Alphabet kicking off big tech’s reporting season on Wednesday. Goldman Sachs’ prime services desk noted hedge funds have pulled back from US tech stocks at a record pace over the past two months, while UBS’ trading desk argued the momentum selloff may be nearing its end and suggested gradually rebuilding positions in AI and semiconductor names. In trade news, the Trump administration is set to impose a fresh 50% tariff on some Canadian goods, though it also unveiled a program offering reduced aluminium duties for companies that build or expand smelting capacity in the US.
Europe
European stocks retreated, with the Stoxx 600 down 0.3% and the FTSE 100 falling 0.7% to 10,524.76. The Houthi blockade threat overshadowed the ceasefire proposal, while earnings season delivered a casualty in Ryanair, which fell 4.5% after the Irish airline posted a sharp drop in first quarter profit as the Middle East conflict lifted fuel costs and weakened demand. Energy was the standout sector, up 1.0%, led by Siemens Energy and Neste.
Computacenter was the session’s best individual performer, climbing 5.55% after a Berenberg upgrade, while BNP Paribas was boosted by a new Street high price target at Jefferies. Prysmian outperformed after signing a deal worth up to €5.5 billion to supply optical cables for data centres. UK assets remained under scrutiny after new Prime Minister Andy Burnham named former defence secretary John Healey as chancellor, a surprise appointment that fuelled speculation about higher military spending following Monday’s gilt selloff.
Australia
The local market is set to open lower after the ASX 200 finished Monday’s session broadly flat at 8,791.30. Corporate news is flowing ahead of reporting season. HUB24 delivered record platform net inflows of $18.9 billion for the 2026 financial year, lifting total funds under administration 20% to $164.3 billion. Telix Pharmaceuticals said second quarter revenue climbed 21% to US$247 million, leaving it tracking toward the upper end of full year guidance, while Clinuvel Pharmaceuticals began trading on the Nasdaq under an upgraded US listing. On the broker front, UBS cut QBE Insurance to neutral, JPMorgan downgraded both Pro Medicus and Lovisa, and Macquarie raised Dicker Data to outperform. BHP is also in focus as unions take their case over the iron ore port strike directly to shareholders. Across the Tasman, New Zealand second quarter CPI lands at 8.45am AEST, with BNZ forecasting annual inflation of 4.1%.
Commodities and Currencies
Brent crude rose 0.9% to US$88.88 a barrel, holding near its highest close since mid June as the Hormuz standoff continues to choke shipping volumes. Gold eased 0.3% to US$4,007.41 an ounce as traders assessed the rate path, while iron ore slipped 0.9% to US$99.35 a tonne. The Australian dollar firmed 0.2% to US69.98¢, and bitcoin added 1.3% to US$65,275. Locally, the 10 year bond yield sits at 4.96% after rising 6 basis points.
Economic Calendar
No Major Economic Announcements
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
