Source: Kapitales ResearchHeadline

• ASX 200 futures indicate a weaker opening, falling 50 points or 0.60%, after Wall Street declined sharply overnight.
• US equities retreated as heavy selling across megacap technology and artificial-intelligence-related stocks weighed on market sentiment.
• Renewed tensions involving the United States, Iran and Houthi forces pushed Brent crude above US$100 per barrel, reviving inflation and supply disruption concerns.
• Australian exporters face additional uncertainty after the Trump administration imposed a 12.5% tariff on imports from Australia.

Global Markets Overview

Global equity markets ended broadly lower as investors responded to escalating geopolitical tensions, a sharp rise in energy prices and heavy selling across large-cap technology stocks. The S&P 500 declined 1.21% to 7,408.00, while the Nasdaq Composite dropped 2.15% to 25,138.00, marking its steepest one-day decline in about a month as artificial intelligence and growth stocks came under pressure. The Dow Jones Industrial Average also retreated 0.97% to 51,712.00.Across international markets, the FTSE 100 fell 0.73% to 10,639.00, while Canada's S&P/TSX Composite lost 0.82% amid weakness in commodity-related shares. In the Asia-Pacific region, market performance was mixed. Japan's Nikkei 225 advanced 0.46% to 66,423.00, supported by exporter gains, while India's benchmark index declined 0.47% to 76,391.00 as investors remained cautious ahead of key economic data releases. New Zealand's NZX 50 edged 0.23% higher to 13,795.00. Overall, market sentiment remained risk-averse as higher oil prices, rising bond yields, and geopolitical uncertainty continued to weigh on global equities.Commodities & Crypto

Commodity markets were broadly weaker, with declines across precious and industrial metals, while crude oil posted strong gains. WTI crude oil surged 6.37% to US$92.36 per barrel as renewed geopolitical tensions in the Middle East intensified concerns over potential supply disruptions. Gold fell 1.96% to US$4,049.77 per ounce, while silver declined 4.06% to US$57.85 per ounce. Copper dropped 2.31% to US$6.30 per pound, reflecting weaker sentiment toward industrial metals, and uranium eased 0.35% to US$5,434.51 following recent gains.In the cryptocurrency market, Bitcoin declined 1.34% to US$65,130 as broader risk aversion weighed on higher-risk assets.Bond Yields

Global sovereign bond yields remained elevated, supporting a cautious market outlook. Australia’s 10-year government bond yield rose to 5.065%, indicating continued pressure from inflation expectations and the prospect of restrictive monetary policy. Japan’s 10-year yield stood at 2.774%, reflecting ongoing expectations of further policy normalisation by the Bank of Japan. Meanwhile, the US 10-year and 30-year Treasury yields eased marginally to 4.700% and 5.165%, respectively. Despite the modest decline, US yields remain high enough to sustain pressure on equity valuations and corporate funding costs. Overall, elevated bond yields suggest financial conditions remain tight, which could continue to weigh on equity valuations, increase corporate borrowing costs and temper investor risk appetite. Until inflation shows clearer signs of moderation and central banks adopt a more accommodative stance, markets are likely to remain sensitive to economic data and policy developments.Key Drivers

• The Magnificent Seven group lost approximately US$767 billion in market value, representing its largest one-day decline since the tariff-driven selloff in April 2025.
• Tesla shares fell approximately 15% after adjusted earnings missed market expectations and free cash flow turned negative.
• Alphabet declined about 7% despite strong revenue growth, as higher capital expenditure guidance raised concerns regarding returns on artificial-intelligence investment.
• Brent crude exceeded US$100 per barrel after Houthi attacks on Saudi oil tankers intensified concerns about regional energy supply.
• President Donald Trump warned that Iran and Houthi forces could face consequences following attacks in the Red Sea.
• The US administration is reportedly considering renewed large-scale military action against Iran, although no final decision has been announced.
• US Treasury yields reached their highest levels of 2026 as oil-driven inflation concerns reduced expectations for near-term rate cuts.
• US initial jobless claims fell to 187,000 in the week ended 18 July, the lowest level since 1969, signalling continued strength in the US labour market.
• The European Central Bank maintained its deposit rate at 2.25%, while signalling that a future increase remains possible if energy-related inflation intensifies.

ASX Company News

• Newmont Corporation (ASX: NEM) reported strong second-quarter 2026 results while reaffirming its full-year production guidance. The company produced approximately 1.3 million attributable gold ounces, along with 7 million ounces of silver and 17,000 tonnes of copper. Operating cash flow reached US$2.9 billion, while free cash flow hit a record US$2.2 billion. Net income attributable to shareholders totalled US$2.2 billion, with adjusted EBITDA of US$3.8 billion. Newmont also declared a quarterly dividend of US$0.26 per share, returned US$1.9 billion to shareholders through dividends and share buybacks, and finished the quarter with US$9.0 billion in cash and a US$3.4 billion net cash position, remaining on track to achieve its 2026 production targets.
• GR Engineering Services Limited (ASX: GNG) secured an AU$229.5 million engineering, procurement and construction (EPC) contract from BHP Iron Ore Pty Ltd for the Yandi Eastern Front-End Facility Upgrade in Western Australia's Pilbara region. The contract forms part of the broader Ministers North Project, subject to regulatory approvals. The scope includes a brownfield upgrade of the Yandi primary crushing circuit and construction of a new 20 Mtpa two-stage crushing plant to integrate Ministers North ore into existing Yandi operations. Early engineering activities and procurement of long-lead equipment have already commenced, while subsidiary Paradigm Engineers will deliver specialist electrical and instrumentation services under the project.

Key Economic Drivers (What to Watch Today)

• 9:00 am AEST – Australia PMI: Indicates activity across manufacturing and services, influencing RBA expectations and the Australian dollar.
• 4:00 pm AEST – UK Retail Sales: Measures consumer spending and signals the strength of household demand.
• 5:30 pm AEST – Germany PMI: Provides insight into business conditions in Europe’s largest economy.
• 6:00 pm AEST – Eurozone PMI: Tracks regional manufacturing and services momentum and may affect ECB expectations.
• 11:45 pm AEST – US PMI: Assesses economic resilience and could influence interest-rate expectations.

Summary

• ASX 200 futures indicate a weaker opening as global risk appetite deteriorates.
• Energy stocks may outperform after oil prices surged on renewed Middle East tensions.
• Technology and consumer discretionary shares could face selling pressure following sharp US sector declines.
• Higher oil prices may strengthen inflation expectations and delay potential interest-rate cuts.
• Australian exporters face additional uncertainty following the introduction of a 12.5% US tariff.
• Defence, healthcare and selected energy companies may attract defensive investor interest.
• Investors should closely monitor developments involving Iran, Houthi forces and the Strait of Hormuz.
• Investors may prefer to remain defensive and avoid taking excessive risk as long as market uncertainty remains high due to volatility, elevated bond yields, and geopolitical tensions.

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