Australian shares to open lower as tech earnings, oil price spike weigh on Wall St
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The news: The Australian sharemarket is set to open lower after Wall Street fell overnight, as earnings from major technology companies reignited concerns over heavy AI spending, while surging oil prices driven by renewed geopolitical tensions fuelled inflation fears and pushed US Treasury yields higher.
The numbers: Updated at 7:51am AEST:
- ASX futures: down 50 points to 8,750 points
- Wall Street: Dow Jones down 0.97%, S&P 500 down 1.21%, Nasdaq down 2.15%
- Europe: FTSE 100 down 0.73%, CAC 40 down 1.64%, DAX down 1.56%
- Spot gold: down 1.96% to USD4,049 per ounce
- Oil prices: Brent up 5.40% to USD100.14/barrel, US WTI up 6.48% to USD92.45/bbl
- AUD: down 0.46% at 69.68 US cents
- Bitcoin: down 1.55% to USD65,094.
The context: All three major US indices ended lower on Thursday, with Nasdaq falling more than 2% and the S&P 500 losing more than 1% as a sell-off in megacap technology stocks weighed on markets. Investors were disappointed by second-quarter results from Alphabet and Tesla, with concerns mounting that heavy investment in artificial intelligence is weighing on profits rather than generating new growth.
Alphabet fell 7.1% after lifting its capital expenditure forecast for the year to as much as USD205 billion ($294 billion), while Tesla tumbled 15% after reporting negative free cashflow in the second quarter.
Elsewhere, Brent crude climbed back above USD100 a barrel after US President Donald Trump vowed “major military punishment” for Iran and its Houthi allies following attacks on two Saudi oil tankers in the Red Sea, extending the conflict to a second major shipping chokepoint.
Iranian state media said a missile struck Qeshm Island in the Strait of Hormuz on Thursday evening, raising the prospect of further attacks in a conflict now entering its fifth month that has already killed thousands and heightened fears of a global economic slowdown.
Higher oil prices fuelled inflation concerns, pushing the US 10 year Treasury yield to 4.7%, its highest level since January 2025. Despite that, traders are still betting on a roughly 64% probability that the Federal Reserve will keep interest rates unchanged next week, according to CME Group’s FedWatch tool.
Locally, life insurance software provider Monvia is scheduled to debut on the ASX at midday.
