Oil above $100 and a tech selloff on AI cost fears pushed the ASX 200 down 0.8%. Energy names rose. US megacap earnings and local CPI data are next.
The ASX 200 fell 66.7 points, or 0.8%, to 8772.30 by Friday's close. Seven of 11 sectors ended lower. Oil pushed back above US$100 a barrel, and technology stocks slid on concerns that artificial intelligence spending is overwhelming near-term benefits, traders said.
Oil's return to triple figures followed President Donald Trump's threats against Iran and Houthi attacks on two Saudi Arabian oil tankers in the Red Sea. Those attacks continue to disrupt global crude supplies, according to traders.
Energy stocks gained on the higher oil price. Woodside shares rose 1.8% to A$32.37. Santos added 1.5% to A$7.97. The rest of the market fell.
The local technology sector followed Wall Street lower. The S&P 500 skidded 1.2% after Tesla dropped 14.5% and Alphabet lost 6.9% on fears that AI spending is overwhelming short-term benefits, analysts said. In Sydney, WiseTech Global and Xero each fell more than 4%. Codan dropped 4.2%. NextDC shares lost 3.6% to A$13.42. TechnologyOne fell 3.9% to A$27.11. Megaport slipped 3.3% to A$18.47. Life360 lost 4.4% to A$23.07.
Resources also took a hit. BHP shares fell 2.9% to A$58.85. Rio Tinto dropped 1.7% to A$160. Fortescue fell 1% to A$18.57.
Gold miners dropped as the gold price fell up to 2.2%. Traders said higher oil prices could reignite inflation, raising the odds of interest rate hikes and pushing up real yields. Northern Star shares fell 3.9% to A$19.93. Evolution Mining dropped 2.4% to A$11.29. Genesis Minerals lost 4.4% to A$5.87. Perseus Mining fell 5.6% to A$4.76. Greatland Resources dropped 6.4% to A$10. Capricorn Metals shed 6.1% to A$11.90.
A few bright spots appeared. Cochlear shares rose 0.5% to A$111.61 after a US government investigation cleared its bionic ear for duty-free import into the US. Insurance technology company Monvia debuted at A$1.12, up 1.8% from its A$1.10 float price.
The coming week brings US megacap results. Microsoft, with an Alpha Score of 59/100, and Meta report on Wednesday, US time. Apple and Amazon follow on Thursday. The results will test whether the AI cost narrative holds. Traders said investors are now rewarding companies that spend less on AI, not more. Coca-Cola, Visa, Boeing, Chevron and dozens of other large caps also report.
Locally, Rio Tinto releases results on Wednesday. Quarterly updates are due from Stanmore Resources, Genesis Minerals, IGO, Woodside, Fortescue and many others.
The June quarter consumer price index is out Wednesday. That print will influence Reserve Bank rate expectations. The US Federal Reserve decides on rates Wednesday; most traders expect no change to the 3.50%–3.75% target.
For Australian markets, the main risk remains oil above US$100. If tensions escalate further, the ASX 200 could test 8700, one trader said. If oil eases and tech earnings reassure, the index may recover toward 8800.
Read more: crude oil profile, MSFT stock page
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