Source: Kapitales ResearchHeadline

• ASX 200 futures point to a higher open despite a broad global equity selloff led by technology and resource stocks overnight.
• The Nasdaq Composite fell 2.2% as semiconductor and memory-chip stocks tumbled amid concerns around AI-related valuations and profit-taking.
• Precious metals remained under pressure, highlighting continued weakness across the resources sector and potential headwinds for mining stocks.
• US equity markets ended lower as heavy selling in technology and resource stocks spread from Asia to Europe and Wall Street, with South Korea's KOSPI plunging 10% amid a sharp semiconductor-led selloff.
• Expectations for tighter US monetary policy increased after Bank of America forecast three Federal Reserve rate hikes in 2026, prompting investors to largely eliminate expectations for interest rate cuts.

Global Markets Overview

Global equity markets traded lower overnight as weakness across technology and resource sectors weighed on investor sentiment. The S&P 500 and Nasdaq Composite recorded notable declines, pressured by a sharp selloff in semiconductor and AI-related stocks, while the Dow Jones was comparatively resilient, supported by strength in defensive sectors. The FTSE 100 also edged lower as investors assessed global growth concerns and tighter monetary policy expectations. Canada's S&P/TSX Composite declined amid broad weakness in commodity-linked sectors. Across the Asia-Pacific region, Japan's Nikkei 225 posted the steepest loss among major indices following heavy selling in technology stocks, while India also closed lower amid a broader risk-off environment. New Zealand's NZX 50 finished slightly weaker as cautious sentiment prevailed. Overall, investors remained focused on the outlook for interest rates, commodity price weakness, developments in the semiconductor industry, and upcoming inflation data releases.Commodities & Crypto

Commodity markets experienced broad-based weakness overnight as investors reduced exposure to cyclical and precious metals amid concerns about global growth and tighter monetary policy expectations. Copper declined to a one-month low, while silver recorded the steepest fall among major commodities, reflecting weaker risk appetite and softer industrial demand expectations. Gold also retreated but continued to trade above the US$4,000 per ounce mark. Oil prices moved lower as improving shipping activity through the Strait of Hormuz eased concerns about potential supply disruptions. In contrast, uranium prices edged higher, supported by continued interest in the nuclear energy sector. Cryptocurrency markets also weakened, with Bitcoin declining as investors adopted a more cautious approach toward risk assets. Overall, commodity and cryptocurrency markets remained under pressure as investors responded to rising expectations of tighter monetary policy, weakening commodity demand outlooks, and a broader shift away from risk-sensitive assets.Bond Yields

Bond markets reflected a cautious tone as investors reassessed the outlook for interest rates and economic growth following increasingly hawkish signals from major central banks. US Treasury yields were mixed, with the 10-year yield easing modestly while the 30-year yield edged higher, suggesting lingering uncertainty around inflation and long-term borrowing costs. Australia's 10-year government bond yield declined slightly ahead of the latest inflation data release, as investors evaluated the potential implications for Reserve Bank of Australia policy. Meanwhile, Japan's 10-year bond yield remained near multi-year highs as markets continued to monitor the Bank of Japan's gradual policy normalisation efforts. Overall, fixed-income markets remained focused on inflation trends, monetary policy expectations, and incoming economic data that could influence the trajectory of global interest rates.Key Drivers

• US indices closed lower as heavy selling in semiconductor and technology stocks outweighed gains in defensive sectors, with the Nasdaq Composite falling 2.2%.
• Semiconductor stocks led the decline, with the NYSE Semiconductor Index dropping 7.8% and the DRAM ETF plunging 14% amid profit-taking and concerns around AI-related valuations.
• South Korea's KOSPI tumbled 10% as foreign investors aggressively sold chip stocks, triggering broader weakness across global equity markets.
• Commodity markets experienced broad-based weakness, with industrial and precious metals coming under significant selling pressure amid concerns about global growth and demand trends.
• Deutsche Bank also adopted a more hawkish stance, projecting two additional rate hikes, while market expectations for policy easing continued to diminish.
• US flash Composite PMI rose to 52.2 in June, indicating the strongest pace of private-sector expansion since January and highlighting resilience in economic activity.
• Oil prices remained under pressure as shipping activity through the Strait of Hormuz improved and Middle Eastern exports resumed, easing supply concerns.
• Trade uncertainty increased after reports suggested the US could impose a minimum tariff of 15%–20% on European imports.

ASX Company News

• Nickel Industries Limited (ASX: NIC) announced a US$169 million investment to acquire a 17.5% interest in the Teluk Metal Industry (TMI) HPAL project in Indonesia. The project is expected to have annual nameplate capacity of approximately 38,640 tonnes of nickel in mixed hydroxide precipitate (MHP), providing Nickel Industries with attributable production of around 6,775 tonnes per annum. The investment strengthens the company's exposure to the EV battery supply chain, while its Sampala Project has been designated as the exclusive ore supplier to TMI, enhancing vertical integration across its nickel operations.
• Tasmea Limited (ASX: TEA) has agreed to acquire 100% of JPS Group for total consideration of up to AU$75 million. The acquisition expands Tasmea's presence in LNG, gas and energy infrastructure markets, adding a portfolio of long-term service agreements and relationships with major energy companies. The transaction is expected to be approximately 5% earnings accretive on a pro forma basis and supports the company's strategy of expanding into high-growth, essential infrastructure sectors while maintaining its FY26 earnings guidance.

Key Economic Drivers (What to Watch Today)

• Australia's May CPI data is due at 11:30 AM (AEST), with markets expecting headline inflation to rise to 4.4% year-on-year from 4.2% in the previous month.
• Commodity markets remain under scrutiny following the sharp overnight decline in industrial metals and precious metals.
• Defensive sectors such as Consumer Staples, Healthcare, Real Estate and Utilities are likely to remain in focus as investors navigate heightened market volatility.

Summary 

• ASX 200 futures point to a higher open despite Wall Street weakness.
• The sharp decline in semiconductor and AI-related stocks highlights growing investor caution toward highly valued technology sectors.
• Resource stocks could face near-term pressure following broad-based weakness across industrial and precious metals markets.
• Improved shipping activity through the Strait of Hormuz has eased concerns about immediate energy supply disruptions, contributing to softer oil prices.
• Australia's inflation data will be closely watched, with the outcome likely to influence expectations for future Reserve Bank of Australia policy decisions.
• Copper fell to a one-month low, while silver declined 6.3% to US$61.46/oz, reflecting broad weakness across metals markets and weighing on sentiment toward resource and mining stocks.
• Market volatility is likely to remain elevated as investors assess inflation trends, central bank policy expectations, commodity price movements, and upcoming corporate earnings results.

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