Good morning. Wall Street fell overnight after President Donald Trump said the United States was reinstating a blockade on Iranian shipping through the Strait of Hormuz and would charge 20 per cent on cargo passing through it. Oil jumped, with Brent up 9.4 per cent to US$83.18 a barrel and WTI up 9.2 per cent to US$78.00. The S&P 500 closed down 0.8 per cent at 7,515 and the Nasdaq fell 1.6 per cent to 25,873, dragged by a semiconductor sell-off that took Micron down about 4 per cent and the US-listed shares of SK Hynix down about 9 per cent. Treasuries sold off and the US dollar rose: the 10-year yield added 4 basis points to 4.61 per cent, the 2-year 5 basis points to 4.21 per cent, and the dollar index gained 0.3 per cent to 101.29.
The move in rates owed as much to the Federal Reserve as to oil. Governor Christopher Waller said that if core inflation runs hot again this week the board will need to consider tightening, noting core PCE inflation has risen from 3.0 per cent in December 2025 to 3.4 per cent in May. Futures now imply about a 46 per cent chance of a rate rise at the 29 July meeting, and the June CPI print lands tonight AEST. Gold fell 2.3 per cent to US$4,009 an ounce as those higher-rate expectations outweighed the geopolitical bid, and the VIX rose 14.2 per cent to 17.16.
The local corporate calendar was quiet ahead of August reporting, with BHP softer on looming industrial action at Port Hedland and AGL Energy cut to underperform by Macquarie. The larger developments were offshore: Shell agreed to sell its Indian renewables arm for US$1.8bn, Williams took a US$5.34bn investment from a Blackstone-led group, Volkswagen flagged up to 100,000 job cuts, and 12 US states sued to block the US$111bn Paramount and Warner Bros Discovery merger. Five of America's biggest banks, JPMorgan, Wells Fargo, Citigroup, Bank of America and Goldman Sachs, report second-quarter results before the US open.
The ASX 200 finished the prior session little changed at 8,808, up 2.5 points, with strength in the banks and Wesfarmers (+1.8 per cent) offsetting falls in the miners. Lithium and uranium names led the declines, with Pilbara Minerals down 3.2 per cent, Liontown down 4.4 per cent, Boss Energy down 3.7 per cent and Paladin down 3.7 per cent, while the gold sub-index eased 1.9 per cent. BHP was softer on looming industrial action at Port Hedland; Woodside rose 3.34 per cent as energy names tracked the oil surge. The Australian dollar was down 0.3 per cent at US69.20 cents and the 10-year bond yield rose 6 basis points to 4.89 per cent.
The S&P 500 closed down 0.8 per cent at 7,515 and the Nasdaq fell 1.6 per cent to 25,873, while the Dow slipped 0.3 per cent to 52,499. Oil and gas names gained as Brent rose 9.4 per cent, but semiconductors fell hard, with Micron down about 4 per cent, SK Hynix's US shares down about 9 per cent and Sandisk down about 12 per cent. Treasury yields rose after Fed governor Christopher Waller flagged a possible July rate rise, the 10-year up 4 basis points to 4.61 per cent and the 2-year up 5 basis points to 4.21 per cent, with the dollar index up 0.3 per cent to 101.29 and gold down 2.3 per cent to US$4,009.
The STOXX 600 closed little changed at 641 and the DAX rose 0.2 per cent to 25,114, while the FTSE 100 was flat at 10,498. Energy majors led on the oil move, with BP up 2.6 per cent, Eni up 2.5 per cent and TotalEnergies up 1.9 per cent, while technology names lagged, ASML down about 2 per cent and Infineon down about 3 per cent. Stocks and bonds fell together as mounting US-Iran tensions weighed on sentiment across the region.
The Nikkei 225 fell 1.9 per cent to 67,243 and the Shanghai Composite dropped 2.1 per cent to 3,914, its weakest in about a month, while the Hang Seng edged up 0.2 per cent to 24,214. Chinese losses were broad, with the defence and rare-earth sub-indices down about 5 per cent and the semiconductor index off nearly 2 per cent as Hormuz tensions sapped risk appetite. The yen sat near a 40-year low, with USD/JPY at 162.39, keeping traders alert to possible intervention from Tokyo.
The 10-year Australian government bond yield rose 6 basis points to 4.89 per cent, up 9 basis points over the week and 63 basis points over the past year, tracking the overnight back-up in US yields.
The US dollar index rose 0.3 per cent to 101.29 on the Hormuz oil surge and Waller's hawkish remarks, while USD/JPY held at 162.39, near a 40-year low for the yen.
The case extends the political focus on Big Four and adviser governance that began with the PwC tax-leaks scandal; separately, the AFR reported super-fund service failures prompting calls for government intervention.
The steady bulk price is a backdrop for the large producers BHP, Rio Tinto and Fortescue.
The downgrade points to sub-2 per cent growth persisting as higher rates and weak confidence weigh on activity.
The reforms streamline responsible-manager licensing for FAR entities and pare back fit-and-proper reporting.
The shift points to changing flows in the domestic managed-fund and ETF market ahead of the tax debate.
The stand-off links the local AI build-out to unresolved copyright policy.
Futures now imply about a 46 per cent chance of a 25 basis-point rise at the 29 July meeting; the US 2-year yield rose 5 basis points to 4.21 per cent and the 10-year 4 basis points to 4.61 per cent, with the June CPI print due tonight AEST.
Ship traffic through the strait fell about 60 per cent on Sunday from a week earlier, according to Kpler data, and Brent is now up 15.5 per cent over five sessions.
Gold gave back 3.5 per cent over five sessions as the prospect of higher US rates outweighed the safe-haven bid from the Middle East escalation.
The print, lifted by food and the oil move, complicates the Reserve Bank of India's room to ease.
The move reflected building bets on a July Fed rate rise ahead of tonight's CPI.
The gauge is up 10.2 per cent over five sessions, though still historically low.
Industrial metals held up better than gold through the risk-off session.
Both slid with the broader risk-off tone, leaving Bitcoin down 47.9 per cent over the past year.
A prolonged memory-chip shortage drove up handset prices and dampened demand.
The project points to shippers seeking to route around the chokepoint as tensions persist.
Port Hedland is the export gateway for the bulk of BHP's iron ore shipments, and the threatened stoppage weighed on the stock even as the benchmark 62 per cent iron ore price held at US$98.72 a tonne.
Macquarie argued a structurally oversupplied electricity market would push AGL's earnings recovery out to FY31, and the downgrade left the stock among the day's laggards.
The Australian reported Ingenia, with a market value near $1.8bn, had secured a Japanese investor to help fund a bid for the roughly $800m Peet; Citi trimmed its Ingenia price target to $6.10.
The Australian Communications and Media Authority's formal investigation into last week's nationwide outage is continuing, keeping the telecoms sector under pressure.
Court approval clears the final hurdle for the deal, with implementation to follow.
The deal extends Mayfield's switchboard and power-connection product range.
The Sydney Morning Herald described the study as underpinning a roughly $649m rare-earths project.
The drawdown adds funding for the drug developer's clinical programs.
The raise funds working capital for the mining-services group.
The notice sets up a board challenge at the property-valuation firm.
Meeting the milestone advances the biotech's licensing arrangement.
The plus-size apparel retailer pointed to a lift in EBITDA as its turnaround progresses.
The portfolio spans 5.0GWp of solar and wind assets, 3.3GWp operating and 1.7GWp contracted, and the sale marks Shell's full exit from Indian renewable generation.
The capital injection helps fund the US natural-gas pipeline operator's growth pipeline.
The reductions follow a slump in China deliveries and a restructuring aimed at simplifying the group's brand line-up.
FloWorks, a distributor of industrial valves and flow-control products, generated about US$1bn in revenue in 2025 across more than 60 locations in the US and Canada.
The move takes the burrito chain into the home market of the cuisine it built its US business on.
The states allege the deal breaches the Clayton Act by lessening competition in theatrical distribution and basic cable, and asked the parties to hold off closing pending the case; the Trump administration cleared it without conditions in June.
Tang would move to an advisory role after three years as the company's public face.
The change comes as the spirits group works through soft demand across its portfolio.
The reductions come as the information group leans further into artificial intelligence.
The result offered an early read on demand across the Indian IT-services sector.
The move lifts the US net-lease REIT's available liquidity.
EBIT was NOK1.7bn at a 16.1 per cent margin, the order backlog reached NOK158bn, and the group completed its acquisition of US missile-maker Zone 5.
The result absorbed a NOK419m net hit from a Danish Supreme Court workers'-compensation ruling, with return on equity of 33.3 per cent and a solvency ratio of 189 per cent.
The raise adds funding for the biotech's oncology programs.
The listing would tap US markets for the power arm of the state-controlled oil group.
“If we get another hot reading on core inflation this week, then the FOMC will need to consider tightening monetary policy in the near term.”
“Core inflation this year has steadily moved up, as measured by the 12-month PCE rate, from 3 per cent in December 2025 to 3.4 per cent in May.”
“This is being reflected in some large price increases on selected goods such as semiconductors, computer chips, servers, computers, and peripherals.”
“The messages from NATO were clear. Europe must continue to invest in its own defence capabilities and seek joint procurements with other countries. In Ankara, NATO countries announced more than $50 billion in new procurements.”
“Modern warfare shows that defence capability is not only about the most advanced systems but also about volume, production pace, stock levels, and having the right cost per effect.”
“We have very recently entered into a partnership with Tesla, one of the most distinctive and innovative brands in the mobility market. Tesla has a strong position in Norway with around one in five new cars sold.”
For wholesale clients only. Prepared by Arc Point OCIO Pty Ltd (ACN 693 569 765), Corporate Authorised Representative (CAR 1319046) of Capella Advisory (AFSL 550125), for wholesale clients within the meaning of the Corporations Act 2001 (Cth); it is not intended for, and should not be relied on by, retail clients. This note is factual market reporting and general information, with any arcpoint view clearly labelled as such. It is not personal advice and does not take into account any person's objectives, financial situation or needs. Information is drawn from sources believed to be reliable but its accuracy and completeness are not guaranteed. Past performance is not a reliable indicator of future performance.
Sources: Yahoo Finance, FRED, RBA, company filings.