Market Open: US sell-off puts Nasdaq into correction territory as bond yields surge
Key Takeaways
- •The ASX is expected to fall at least 0.4% after Wall Street weakened overnight.
- •The 30-year U.S. bond yield rose to a 19-year high, intensifying inflation concerns and pushing the Nasdaq into correction territory.
- •PLS Group reported 12-month production of 879.5 kilotonnes, above the top end of its guidance range.
- •Rio Tinto will pay its largest half-year dividend in four years after posting strong profits supported by higher copper and aluminium prices.
- •The Australian dollar is trading at 69.5 U.S. cents, while Brent crude has risen 7.5% to $90.40 a barrel.
At The Bell — The Australian share market is expected to take a hit today, at least 0.4%, after Wall Street slumped on Wednesday. The main driver was the 30-year U.S. bond yield, which climbed to a 19-year high amid inflation concerns, pushing the Nasdaq into correction territory.
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While much of Week 31 trading has been dovish after Michele Bullock suggested further interest-rate hikes are unlikely, the U.S. downturn appears difficult to avoid. The Nasdaq fell 1.74%, while the S&P 500 and the Dow were as much as 2.2% weaker. For Australian investors, the combination of higher global yields and a weaker U.S. session is likely to keep attention on rate-sensitive sectors and companies with offshore earnings as reporting season continues.
Much of the move is also tied to the U.S. Federal Reserve holding rates, despite bond traders expecting Kevin Warsh to “panic” a bit. Instead, he said there is “no magic wand” to lower inflation quickly, and then aligned with what Donald Trump would have wanted by keeping rates unchanged to avoid further uproar among Americans.
Trump has also said he will go “very hard” on Iran with fresh strikes.
It is a difficult day for ASX companies to share news, but the reporting season continues. Champ Iron (ASX:CIA), Perseus (ASX:PRU), and Boss (ASX:BOE) are all releasing updates today.
PLS Group (ASX:PLS) has already released its FY26 quarterly, describing it as a “strong operational year.” The company reported total 12-month production of 879.5 kilotonnes, which exceeded the top end of guidance. It also said FY27 should be stronger and set total spodumene guidance at 1,030–1,100kt.
Elsewhere, Rio Tinto (ASX:RIO) will pay its biggest half-year dividend in four years after reporting strong profits supported by higher copper and aluminium prices.
Qantas (ASX:QAN) is also one to watch after completing a 24-hour “Sunrise” flight to Toulouse.
In foreign exchange, the Australian dollar is buying US 69.5 cents today.
In commodities, all quoted in U.S. dollars, Brent crude has bounced 7.5% to $90.40 a barrel. Iron ore is up 0.1% to $97.85 a tonne in Singapore. Gold is at $4,075 an ounce, and U.S. natural gas futures are at $2.72 per gigajoule.
That’s HotCopper’s Market Open. I’m Isaac McIntyre — happy trading today.
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