Good morning. Wall Street fell for a second session as the AI trade wobbled. The S&P 500 lost 1.0 per cent to 7,458 and the Nasdaq 1.4 per cent to 25,520, with chipmakers leading the retreat after China's Moonshot AI unveiled Kimi K3, a model it says rivals the largest US systems. The VIX rose 12.2 per cent to 18.77, and Apple briefly passed Nvidia as the world's most valuable company as Nvidia fell. Treasuries were mixed, the 10-year down 3 basis points to 4.54 per cent and the 2-year up 3 to 4.16 per cent, while the US dollar held, the DXY at 100.75.
Oil was the other overnight story. Brent rose 4.6 per cent to US$88.09 and WTI 3.6 per cent to US$81.77, up more than 12 per cent over the week, as US-Iran clashes disrupted shipping through the Strait of Hormuz. Gold rose 0.9 per cent to US$4,023. The oil surge revived bets on a Federal Reserve rate rise: Dallas Fed president Lorie Logan called for modestly higher rates and vice chair Philip Jefferson said energy-driven inflation could force the Fed's hand, with futures now pricing about a 73 per cent chance of a rise by December.
The selling ran through Asia, where the Nikkei fell 4.0 per cent to 64,141 and SoftBank dropped about 9 per cent. The ASX 200 closed the prior session down 0.5 per cent at 8,797, with the miners off 2.9 per cent. In local corporate news, Perpetual rejected a revised, sweetened takeover proposal from a vehicle backed by Sweden's EQT, and Coles walked away from a roughly $4 billion move on pet-care group Greencross.
The ASX 200 closed the prior session down 0.5 per cent at 8,797, ending the week little changed. Materials fell 2.9 per cent, their weakest session in nearly a month, with BHP down 2.7 per cent and Rio Tinto 2.4 per cent, and the gold miners off as much as 4.3 per cent as bullion slipped from recent highs. Energy rose about 1.5 per cent on the oil spike, while the banks and consumer staples held up. The Australian dollar was at US69.85 cents, down 0.2 per cent, and the 10-year bond yield was 4.91 per cent.
The S&P 500 fell 1.0 per cent to 7,458, the Nasdaq 1.4 per cent to 25,520 and the Dow 0.8 per cent to 52,146, as a chip-led selloff extended into a second day. The Philadelphia Semiconductor index headed for its worst week since March after China's Moonshot AI released a new model, and the VIX rose 12.2 per cent to 18.77. The 10-year Treasury yield eased 3 basis points to 4.54 per cent, the US dollar held at 100.75 on the DXY, and Brent rose 4.6 per cent to US$88.09.
The Stoxx Europe 600 slipped 0.3 per cent to 642 and Germany's DAX 0.3 per cent to 24,831, while London's FTSE 100 rose 0.3 per cent to 10,600, helped by its heavy weighting in oil majors. Shell, BP and TotalEnergies gained between 1.8 and 2.7 per cent as crude jumped on the Middle East escalation.
Japan's Nikkei 225 sank 4.0 per cent to 64,141, having fallen more than 6 per cent intraday, as chip and AI names tracked Wall Street lower and SoftBank dropped about 9 per cent. China's Shanghai Composite fell 3.0 per cent to 3,764 and Hong Kong's Hang Seng 1.8 per cent to 24,562. The yen was little changed at 162.35 per US dollar.
The Reserve Bank's next board meeting is on 11 August; Westpac forecasts a rise as soon as that meeting, while Commonwealth Bank, NAB and ANZ expect the cash rate on hold through 2026 with cuts not starting until 2027.
The mining fall tracked the global risk-off move rather than the steel-making raw material, which is up 1.8 per cent over the past year.
The bond yield is up 53 basis points over the past year, and the currency is up 0.6 per cent over five sessions and 7.5 per cent over 12 months as the US dollar has softened.
Gold was at US$4,023 an ounce, up 0.9 per cent overnight but down 2.0 per cent over five sessions as rising US rate-hike bets lifted the appeal of yield.
The metal still holds a 14.3 per cent gain over the past year.
The work targets better data on private credit funds and stronger practices by superannuation trustees, as non-bank lending keeps growing; the superannuation pool stood at $4.5 trillion in December, about 160 per cent of GDP.
The 2-year Treasury yield rose 3 basis points to 4.16 per cent while the 10-year fell 3 to 4.54 per cent, flattening the curve; Dallas Fed president Lorie Logan called for modestly higher rates and vice chair Philip Jefferson flagged energy-driven inflation as a critical risk.
Shipping traffic through the Strait of Hormuz fell sharply and a tanker was hit by a projectile off Oman as US-Iran hostilities escalated; Iran said it struck US targets across several Gulf states.
That was roughly 47 per cent more than a year earlier, with around US$300 billion expected across the year, and investor appetite is thinning: the ratio of orders to bonds on offer has fallen from near 5 times in February to below 2 times in July.
The metal was caught between the Iran war premium in oil and rising US rate-hike bets, which lift the appeal of yield-bearing assets over non-yielding bullion.
The step would ease trade tensions around the financial hub.
The index is up 24.9 per cent over five sessions as the AI-led selloff spread across equity markets.
Ethereum eased 1.0 per cent to US$1,845; both remain well below their levels of a year ago.
Separately, Western oil companies signed dozens of agreements in Iraq as the OPEC member seeks to diversify how it reaches global markets.
The Japanese yen sat at 162.35 per US dollar, where verbal intervention by Tokyo failed to move it, according to Scotiabank.
The revised terms valued Perpetual at about A$2.5 billion, or A$22.07 a share; the board said the proposal was highly conditional and did not adequately represent fair value.
The move, pursued with TPG Capital, was valued at about $4 billion and would have added Greencross's 240 stores and more than 200 vet clinics; Coles shares rose close to 5 per cent on Friday.
The miner guided to 360,000 to 400,000 ounces at an all-in sustaining cost of A$2,990 to A$3,390 an ounce, with Duketon at 240,000 to 270,000 ounces and its 30 per cent share of Tropicana 120,000 to 130,000 ounces.
The company committed A$34 million in FY27 to about 123 kilometres of drilling and studies, and said the open pit had identified 24 per cent more metal over the six months to March than its reserve model implied.
Mission is due up to US$292 million in upfront, development and commercial milestones plus tiered royalties; Dimerix said the deal was non-dilutive, with first-patient dosing expected in the first half of 2027.
The announcement confirmed the scheme's implementation alongside board and management changes and the issue of new capital.
The deal sets the commercial pathway for the company's Spontan product in the US market.
The company separately proposed a change of company name and a share consolidation, to be put to a general meeting.
The investment brings a strategic partner onto the register of the copper and zinc developer.
The payment supports the company's manganese-to-battery-materials project.
The company said accelerated data are now expected in the second quarter of the 2027 calendar year.
The agreement commercialises the company's water-treatment technology at the Broken Hill operation.
The dealership group flagged the remediation issue in a filing to the market.
The alumina and aluminium producer's result covers items 2.02 and 9.01, the earnings-release disclosure.
Anthropic proposed the arrangement in June; it would be smaller than the roughly US$45 billion, three-year compute deal Anthropic struck with SpaceX in May, and would help Meta turn data-centre spending into revenue.
Oracle expects fiscal 2027 capital expenditure of up to US$95 billion; across the sector, the five largest cloud and AI firms sold about US$159 billion of bonds in the first five months of 2026, up 47 per cent on a year earlier.
Group truck order intake rose 33 per cent year on year and the company nudged up its 2026 forecast for the European truck market to 315,000 units, while flagging a needed delivery catch-up in North America.
The quarter was dominated by contracts for three submarines for Poland and a first batch of 16 Gripen E fighters for Ukraine, with organic sales growth of almost 30 per cent.
Return on equity was 15.5 per cent excluding restructuring costs; the bank will pay US$50 million to the DFS over disclosure failures in 2016 and 2018, concluding investigations into its historical shortcomings.
Gross margin reached 68 per cent and high-performance computing made up 66 per cent of revenue, though the shares fell about 7 per cent on Friday in the broader chip selloff.
The settlement was disclosed in federal court filings.
US investigators have turned to farms in Mexico as the source of the outbreak, according to reporting on a company document.
The revised approach lifts the terms for the intellectual-property investment firm.
The luxury carmaker confirmed the discussions after a report it was seeking to raise capital.
The result included a US$36 million refund of US tariffs paid under the IEEPA, and the Swedish medical-technology group reiterated full-year organic growth guidance of 3 to 5 per cent.
The US health insurer disclosed the breach in a regulatory filing.
The fall reflected a revenue-recognition timing shift from its Sell First, Pay Later rollout and lower listing volumes, while average revenue per listing rose 12.4 per cent.
“I currently believe modestly higher interest rates would better balance the outlook and risks for the FOMC's dual mandate goals.”
“The question of whether the recent increase in energy prices will feed into longer-term inflation expectations and result in a persistent rise in inflation is a critical one.”
“An impressive 21 per cent of Volvo Penta's order book value now is related to data centre build-out.”
“What we definitely need to see continue, though, is hyperscalers' capex.”
“What's been defining the quarter was the major contracts that we have received on the submarines in Poland and also the Gripen E version contract with Ukraine.”
“Our proactive work contributed to high activity in the mortgage business during the quarter.”
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.