Good morning. United States shares ended little changed, with the S&P 500 flat at 7,357 and the Nasdaq down 0.5% to 25,359 as technology gave back ground. Treasuries rallied, the 10-year yield falling 9 basis points to 4.41% and the 2-year 5 basis points to 4.11%. Oil rose after Iran struck a commercial ship in the Strait of Hormuz, halting a plan to move stranded vessels through the waterway, and Brent gained 1.7% to US$75.00. Copper jumped 3.2% to US$13,515 a tonne and gold added 1.3% to US$4,042.
The cost of the artificial-intelligence build-out is reaching consumers. Apple raised prices on its Macs and iPads by about 20%, blaming a shortage of memory and storage chips that the data-centre boom has made scarce, and Microsoft lifted Xbox console prices by up to US$150 for the same reason. Both followed Micron's record quarterly result, where memory demand from AI servers drove the gains. The Federal Reserve's hawkish turn at its June meeting still frames the rates picture: futures now imply a greater chance of a rate rise in September than they did a week ago, and New York Fed president John Williams said policy is well placed to return inflation to 2%.
Locally, the ASX 200 closed the prior session up 0.2% at 8,808. Worley cut its 2026 earnings guidance, citing up to $60 million of lost underlying earnings from Middle East project delays, and its shares fell about 10%. May employment rose 40,300, more than expected, though the unemployment rate edged down to 4.4% on gains weighted to part-time work. The Australian dollar traded at US69.14 cents and iron ore held at US$100.52 a tonne.
The gains were weighted to part-time roles, underemployment ticked higher and total hours worked fell; household spending rebounded 1.3% in May after a 1.1% fall in April.
The RBA's May projections have headline inflation peaking near 4.8% in the June quarter and trimmed mean around 3.9%, lifted in part by higher fuel prices.
The 10-year government bond yield eased 6 basis points to 4.78% and iron ore held at US$100.52 a tonne.
Futures now imply a greater chance of a Fed rate rise in September than a week ago, after the hawkish shift at the June meeting.
The closely watched measure ticked higher, keeping the Fed's caution about price pressures in view.
Brent rose 1.7% to US$75.00, copper 3.2% to US$13,515 a tonne and gold 1.3% to US$4,042; the United Nations shipping agency paused its evacuation effort.
That is roughly double the $30 million to $40 million flagged in April, with a further estimated $50 million translation impact from a stronger Australian dollar in the second half; the company said no contracts had been cancelled and the shares fell about 10%.
BHP and Rio Tinto are the most exposed local names to the copper move; copper is up 24.8% over the past year and iron ore 6.2%.
Brent rose 1.7% to US$75.00, though it remains down 5.7% over five sessions; Woodside and Santos track the oil price closely.
APRA has said domestic private-credit risks remain contained at about $200 billion, roughly 3% of the size of the banking system; the RBA cash rate is held at 4.35%.
The MacBook Air now starts at US$1,299, up from US$1,099; chief executive Tim Cook said the increases had become unavoidable as the AI data-centre build-out lifted component costs, and the shares fell.
The move follows Apple's price rises and points to AI-driven component costs spreading across consumer electronics.
FT reported the print prompted a reshuffle across technology stocks; memory pricing is now feeding into the cost of consumer devices.
Marianne Lake, who ran consumer and community banking and was seen as a leading contender, will retire after more than 25 years; Dimon expects to stay about three more years, and the shares rose.
The decision adds to the legal pressure on European oil majors over their contribution to climate change.
“The current stance of monetary policy is well positioned to restore inflation to 2 per cent. I expect inflation readings to edge down in the coming quarters, although substantial risks remain.”
“We've missed on inflation for five years, and we're going to fix that.”
“Rising component costs, supply constraints, geopolitical uncertainty, and a once-in-a-generation AI build-out are challenging businesses to move faster and with more precision.”
“This quarter has been a difficult quarter for Western Europe. We saw a deterioration in consumer confidence across several of our key markets.”
“We are now at a gross margin of 54.1% on a rolling 12-month basis, which puts us in the range of what we have called a more normalised gross margin of 54 to 55 per cent.”
“Any passage outside the designated framework will not be covered by safe-passage guarantees, and the consequences rest with the vessel's owner, operator and commander.”
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.