ASX wobbles as oil stocks and gold miners fall, Wall Street slips

The Australian sharemarket opened higher but erased its gains within the first half hour of trading as investors await progress on a further round of peace talks between the US and Iran after the latest rise of tensions in the Middle East, which sent Wall Street lower overnight.

The S&P/ASX 200 was down 20.2 points, or 0.2 per cent, at 8933.10 as of 10.41am AEST. The local bourse had inched 0.1 per cent higher on Monday, with investors cautiously optimistic ahead of the end of a ceasefire on early Thursday AEST. The Australian dollar slipped 0.1 per cent to US71.70¢.

Energy stocks were the biggest weight on the market in early trade as oil prices eased on signs that Iran will attend negotiations with the US in Islamabad before the ceasefire ends. West Texas Intermediate for June fell as much as 2.2 per cent to around $US86 a barrel this morning. Brent had closed 5.6 per cent higher on Monday at more than $US95 ahead of trading in Asia. Local oil and gas giants Woodside and Santos were down 1 per cent and 1.2 per cent, respectively.

Iran is sending a team to the Pakistani capital, according to people familiar with the plans who declined to be identified. Earlier, Tehran had said it was hesitant to participate in further peace talks with the US. Vice President JD Vance is travelling to Pakistan to resume negotiations, “either Tuesday night or Wednesday morning,” Donald Trump said in a phone interview on Monday.

The US president said it’s “highly unlikely” that he’d extend the truce, which expires on “Wednesday evening Washington time.”

Gold producers weighed on the materials sector as gold prices steadied. Bullion was near $US4830 an ounce in early trading, having lost 0.2 per cent in the previous session. Northern Star Resources fell 1.7 per cent and Evolution Mining lost 2 per cent.

Iron ore major Rio Tinto, meanwhile, added 0.2 per cent. The mining giant said its first-quarter global iron ore production, including first shipments from its new Simandou mine in Africa, was up 12 per cent, and its copper output was up 9 per cent year-on-year. Chief executive Simon Trott said the scale and quality of Rio’s mines “ensured growth and supply chain resilience against changing operating conditions as we continue to closely monitor the evolving situation in the Middle East.” Larger rival BHP’s shares also edged up 0.2 per cent.

Woolworths shares rose 0.4 per cent ahead of this morning’s resumption of a landmark court case of Australia’s consumer watchdog, which has accused the retail giant of selling groceries through discounts that weren’t real. Its lawyers will dismiss in Sydney’s Federal Court the Australian Competition and Consumer Commission’s accusations that it sold pantry staples in its “Prices Dropped” program at the same or an even higher price.

The case follows rival Coles’ fortnight-long defence of the same accusations heard by the Federal Court in February, the final judgment for which is reserved until Woolies’ case concludes. Coles shares dropped 0.3 per cent.

Tech stocks were among the local bourse’s early winners, with software makers WiseTech Global and Xero up 2.1 per cent and 1.2 per cent, respectively. The key financial sector, which accounts for over a third of the market, was flat.

On Wall Street overnight, US stocks gave back a bit of their recent record-breaking rally. The S&P 500 slipped 0.2 per cent from its all-time high for just its second drop in 14 days after the US seized an Iranian-flagged cargo vessel that it said had tried to evade its blockade of Iranian ports. The Dow Jones Industrial Average dipped less than 0.1 per cent, and the Nasdaq composite fell 0.3 per cent.

Worries that Iran could keep petroleum pent up in the Persian Gulf if it continues to block tankers from exiting the Strait of Hormuz prompted the turnaround from the prior trading day on Wall Street, when stocks soared and oil prices tumbled after Iran said Friday it was reopening the strait to commercial traffic. That enthusiasm vanished quickly after Iran closed the strait again on Saturday as America pressed ahead with its blockade of Iranian ports.

Monday’s relatively muted moves suggest investors still see a possibility of a US-Iranian agreement that could get oil flowing again from the Middle East to customers worldwide. It would be in both countries’ economic interests to end the war.

Companies with big fuel bills fell to some of Wall Street’s larger losses following the rise in crude’s cost, as they have through much of the war. Norwegian Cruise Line Holdings dropped 3.5 per cent, and Royal Caribbean Group lost 1.1 per cent.

United Airlines sank 2.8 per cent, and American Airlines fell 4.2 per cent after American said it’s not interested in a merger with United. Airline stocks had flown higher last week following a report saying United wanted to combine with its rival.

On the winning side of Wall Street was TopBuild, a distributor of insulation and building products, which jumped 19.4 per cent. QXO is buying it in a deal valued at roughly $US17 billion.

One big reason the US stock market has been so strong recently is the big profits that US companies have been reporting for the first three months of 2026, as well as expectations for continued growth.

While reporting stronger profits for the latest quarter than analysts expected, several of the biggest US banks said last week that they see the US economy remaining resilient, particularly because of solid spending by US consumers.

“Despite geopolitical risks, the earnings recovery remains intact,” according to Morgan Stanley strategists led by Michael Wilson. It’s remained so solid that analysts have even raised their profit expectations since the war began for the spring of 2026.

with AP, Bloomberg

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