Wall Street hangs near its records as oil prices ease, ASX set to slide
Stan Choe
Updated ,first published
Australia’s stock market fell in early trading after US forces launched fresh airstrikes on Iran, and despite recent optimism a resolution to the war that began nearly three months ago remains elusive.
The S&P/ASX 200 index fell 57.60 points, or 0.7 percent, to 8660.10 as of 11:15 GMT, while consumer stocks across all sectors fell. The sell-off erased the market’s gains from the previous session, with the ASX rising 0.7 per cent after data showing inflation was lower than expected in April raised hopes that the Reserve Bank would not raise interest rates for another month. The Australian dollar was down 0.2 percent at 71.30¢.
A US official said the latest attacks were defensive and that America intends to maintain the current ceasefire. It said Central Command forces shot down four one-way Iranian attack drones fired at a merchant ship and also hit another Iranian drone launch unit at Bandar Abbas near the strait.
Hours earlier, President Donald Trump said he was “not satisfied” with negotiations with Iran, dampening expectations for any progress any time soon. The White House also rejected an Iranian report on a draft interim peace agreement that would allow traffic in the Strait of Hormuz to return to normal within a month, calling it a “complete fabrication.” US Secretary of State Marco Rubio said “we will see if progress can be made in the next few hours and days” on Iran.
Initial market losses were caused by key financial and mining sectors, which account for close to 60 per cent of the total ASX. All four major banks were in the red; CBA lost 0.7 per cent, while Westpac, National Australia Bank and ANZ Bank lost 0.9 per cent. Struggling exchange operator ASX Ltd fell for a third straight day, falling a further 3.7 per cent.
BHP, one of the mining heavyweights, lost 0.7 percent, Rio Tinto 2.1 percent and Fortescue Metals 1.3 percent. Precious metal producers also sold off; While gold miners Northern Star Resources lost 3.2 percent, Evolution Mining lost 2.9 percent and Newmont lost 4.6 percent, gold continued its two-day decline, while the lack of progress in peace talks continues to put pressure on interest rates. Bullion traded around $4,450 per ounce after falling 2.6 percent in the previous two sessions. South32, owner of Australia’s largest silver mine, fell 1.9 per cent.
IT shares pared Wednesday’s gains. Software makers Xero (down 1.2 per cent), WiseTech Global (down 0.8 per cent) and Technology One (down 1.5 per cent) traded lower after US enterprise software giant Salesforce delivered a disappointing sales outlook, irritating investors already worried about the possibility of AI disrupting the industry.
Energy stocks also fell, with oil prices falling more than 5 percent on Wednesday, with oil and gas giants Woodside and Santos falling 0.6 percent and 0.4 percent, respectively, and refiner Ampol gaining 0.1 percent. However, after the latest airstrike news, oil prices started to rise again. Brent rose above $96 a barrel, while West Texas Intermediate was near $90.
Overnight on Wall Street, US stocks finished the Wednesday session roughly where they started, as investors took profits from tech names but remained optimistic that an end to the war in the Middle East was near.
The S&P 500 Index closed little changed. The tech-heavy Nasdaq 100 Index fell 0.1 percent, while the Dow Jones Industrial Average rose 0.4 percent.
While the choppy session didn’t lead to major moves in the S&P 500, “there was a lot of movement below the surface,” Vital Knowledge founder Adam Crisafulli said. He noted that Wednesday’s drop in oil prices put pressure on energy stocks and “investors took profits on some hot tech names, including Nvidia.”
Shares of companies with large fuel bills led hopes that lower oil prices would remove a major dent in their profits. Norwegian Cruise Line Holdings increased 6.1 percent and United Airlines increased 6.3 percent. Delta Air Lines rose 3 percent to an all-time high.
Stocks have managed to hit records despite painful inflation and uncertainty caused by high oil prices; That’s largely because companies are reporting surprisingly strong profits at the start of 2026, and forecasts are for that to continue.
Bath & Body Works gained 9.7 percent in value, while Abercrombie & Fitch gained 8.9 percent after announcing more profits than analysts expected in the last quarter. This is true even as U.S. consumers continue to say they are discouraged about the economy and inflation.
Lululemon Athletica rose 2.9 percent after a deal that will add founder Chip Wilson and former chief marketing officer of ESPN and former co-CEO of On to its board of directors.
On Wall Street’s losing side was Dick’s Sporting Goods, which fell 6 percent in the latest quarter despite making a profit that beat expectations. Analysts noted how much profit was made for every dollar in revenue, with some calling it a bit weak.
Oil and gas stocks also lost value due to falling crude oil prices. Exxon Mobil fell 1.3 percent and Chevron fell 1.3 percent. Halliburton fell 3.6 percent, bringing its gains this year back to 40 percent.
In the bond market, Treasury bond yields declined after falling oil prices removed the pressure on inflation. The yield on the 10-year Treasury note fell to 4.48 percent, down from 4.50 percent at the end of Tuesday and from 4.67 percent roughly a week ago.
This is a period of respite from recent gains in yields in bond markets around the world, which threaten to slow economies and drive down stock prices and the prices of every other investment. Higher yields have pushed the average long-term U.S. mortgage rate to its most expensive level since last summer, and that could constrain companies from borrowing to build the AI data centers that have recently fueled the growth of the U.S. economy.
In foreign stock markets, indices in Europe were mixed.
AP via Bloomberg
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