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🇦🇺 Australia /Economy & Trade

Live: ASX set to fall as oil tops $US100

From ABC Australia · () English

Summarized and contextualized by DistantNews.

At a glance

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  • The ASX is expected to decline as Brent crude oil prices surpassed $US100 a barrel, reigniting inflation concerns.
  • Wall Street experienced a sell-off, with the S&P 500 dropping 1.2% and the Nasdaq falling 2.15%.
  • Fears about the returns on massive AI spending by tech giants, alongside oil price surges, contributed to the market downturn.

Australian markets are bracing for a fall as Brent crude oil futures surged past $US100 a barrel, fueling renewed inflation worries. The jump in oil prices, a 7% increase, occurred after Houthi rebels attacked oil tankers in the Red Sea, intensifying fears over global oil supplies.

Brent crude futures jumped 7% and hit $US100 dollars again as the escalating conflict in the Middle East renewed fears over global oil supplies.

— Lin LinReporting on the market movements and the reasons behind them.

This surge in oil prices put pressure on global stock markets. Overnight, Wall Street saw a significant sell-off, with the S&P 500 index declining by 1.2% and the Nasdaq composite falling by 2.15%. The market downturn was exacerbated by doubts surrounding the profitability of substantial investments in artificial intelligence by major tech companies.

The surge in oil prices prompted worries about inflation days before the next US Federal Reserve meeting.

— Lin LinExplaining the broader economic implications of the oil price increase.

Earnings reports from tech giants like Google and Tesla have stoked concerns about the enormous spending on AI and whether these investments will yield expected returns. This, combined with the escalating geopolitical tensions in the Middle East and the subsequent rise in oil prices, contributed to the negative sentiment on the stock market. Higher bond yields are also pushing up borrowing costs, with the 10-year Treasury yield reaching its highest point in over a year.

Higher bond yields are pushing up borrowing costs, with the 10 year Treasury yield at its highest in more than a year.

— Lin LinDetailing the impact of rising yields on the financial markets.
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Originally published by ABC Australia. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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