ASX 200 futures are pointing sharply lower on Monday morning, down 210 points or 2.38% at 9:45 am AEDT, after a rough end to last week on Wall Street and another jump in oil prices stoked fresh inflation fears.
The local market heads into Monday on shaky footing after the S&P/ASX 200 fell 1% on Friday and 3% for the week, while the conflict involving the US, Israel and Iran continues to escalate. Investors are now trying to weigh what matters more in the near term: safe-haven buying in gold and energy, or the broader drag that higher oil prices could have on inflation, interest rates and growth.
Global markets turn defensive again
Wall Street finished last week in the red, with all three major benchmarks closing near their lows as the oil spike and weaker US jobs data added to the uneasy mood.
The S&P 500 fell 1.33% on Friday, the Dow lost 0.94% and the Nasdaq dropped 1.59%, while the Russell 2000 slid 2.33%. For the week, the Dow was down 3.01%, the S&P lost 2.02% and the Nasdaq fell 1.24%.
What changed late in the week was that the market stopped treating the Middle East conflict as a short-lived geopolitical shock and started looking more seriously at the inflation fallout. WTI crude surged more than 12% on Friday to US$90.90 a barrel, its highest level since September 2023, after warnings that Gulf output could be curtailed and shipping through the Strait of Hormuz remained close to a standstill.
That has made the market backdrop more difficult. Higher oil prices feed directly into transport, logistics and household costs, which in turn clouds the interest rate outlook just as growth indicators are starting to soften.
US payrolls added another layer of concern. Non-farm payrolls unexpectedly fell by 92,000 in February, while unemployment ticked up to 4.4%. Under normal circumstances, weaker labour data might boost hopes for rate cuts. This time, with energy prices surging, investors are instead worrying about a stagflation-style setup.
Back home
The ASX held up better than some offshore markets on Friday, but still finished lower as heavyweight miners dragged the benchmark down.
The S&P/ASX 200 closed 89.3 points lower at 8,851.0. Materials was the clear weak spot, falling 4.1%, while financials, real estate and industrials also lost ground. Energy was little changed overall, while tech managed another strong rebound, rising 4.6%.
That split tells the story of the market right now. Traders were willing to buy back into beaten-down growth names, but there was no appetite for the big miners as concerns around China, commodity demand and broader risk sentiment kept pressure on the sector.
BHP and Rio Tinto were both hit as the market digested reports of renewed tension around iron ore trade with China. Gold miners also failed to capitalise on firmer bullion prices, with the selling broad enough to drag down names that would usually benefit from a risk-off tape.
Today’s lead points to another difficult open. Oil and gold should remain supportive for parts of the resources space, but a futures fall of nearly 2% suggests the broader market is still in de-risking mode.
There are also no earnings to steady sentiment, leaving macro headlines firmly in charge.
On the index side, the March quarterly rebalance may draw some interest. Greatland Resources Ltd (AIM:GGP, OTC:GRLGF, FRA:G8G, ASX:GGP) is set to join the ASX 100, while Predictive Discovery Ltd (ASX:PDI, OTC:PDIYF), SRG Global and Vulcan Energy Resources Ltd (ASX:VUL, OTC:VULNF, XETRA:VUL) will enter the ASX 200. In the All Ordinaries, additions include St George Mining Ltd (ASX:SGQ, FRA:S0G, OTC:SGQMF), Nova Minerals Ltd (ASX:NVA, NASDAQ:NVA, OTC:NVAAF, FRA:QM3), Lindian Resources Ltd (ASX:LIN, OTC:LINIF), European Lithium Ltd (ASX:EUR, OTCQB:EULIF), Titan Minerals Ltd (ASX:TTM, OTC:TTTNF) and Cyprium Metals Ltd (ASX:CYM, OTCQB:CYPMF).
Commodities and currencies
Commodity markets remain highly volatile, with oil still doing most of the talking.
- WTI crude jumped 12.21% to US$90.90 a barrel, as traders priced in the risk of a prolonged disruption to Middle East supply.
- Gold rose 1.47% to US$5,158.89 an ounce, holding its safe-haven appeal even as bond markets and the US dollar remained unsettled.
- Copper edged up 0.07% to US$5.76/lb, while iron ore also firmed to US$101.91 a tonne. Aluminium also surged more than 4% to around US$3,420 a tonne as traders weighed the risk of supply disruptions across Gulf smelters.
- The Australian dollar slipped 0.65% to US69.85 cents, reflecting the broader risk-off tone.
What’s on today
China inflation data lands at 12:30 pm AEDT and could shape sentiment for miners and broader commodity-linked names.
Beyond that, the market is likely to stay glued to the same drivers that dominated late last week: oil, yields and the latest headlines out of the Middle East.
For now, the setup is clear enough. The ASX is staring at a sharply lower open, with energy likely to offer some relative resilience but the broader market still vulnerable to another round of selling if the geopolitical picture worsens.
