Staff writers
Updated December 16, 2025 — 11:00am,first published December 16, 2025 — 2:24am
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The Australian sharemarket spiked at the open but fell into the red by midday as a slump in tech shares more than offset a rise in the nation’s banking stocks.
The S&P/ASX 200 was down 25.2 points, or 0.3 per cent, at 8609.8 at 1.22pm AEDT, with only three of its 11 industry sectors advancing. Overnight, Wall Street drifted in mixed trading ahead of economic reports that could determine where interest rates, and thus stock prices, are headed in the world’s biggest economy.
Wall Street made a dour start to the week. AP
“Investors appear indecisive about making bold moves ahead of a heavy plate of high-profile economic data,” said Jose Torres at Interactive Brokers.
The Australian dollar was trading at US66.43¢ at 1.24pm.
Financial stocks rose early but shed much of their early gains by the afternoon, with Commonwealth Bank – the biggest stock on the ASX – up 0.3 per cent, while National Australia Bank and ANZ Bank both edged up by 0.1 per cent. Westpac lost 0.7 per cent.
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The tech sector slumped after AI stocks’ scary swings on Wall Street over the past sessions, with software makers WiseTech Global, Xero and Technology One 2 per cent lower. Data centre operator Next DC lost 2.8 per cent and tracking app Life 360 slumped 6.3 per cent.
Energy stocks were also lower after the US oil benchmark fell to its lowest level since February 2021, with traders weighing renewed signs of optimism surrounding a deal to end the war in Ukraine and mixed economic data from China. West Texas Intermediate settled below $US57 a barrel in thin trading ahead of the Christmas and New Year holidays. Oil and gas giants Woodside and Santos retreated, trading down 1.7 per cent and 1.8 per cent, respectively.
Mining stocks were mixed after Monday’s sell-off, which had been triggered by falling commodity prices after China’s Ministry of Commerce said on Friday that exporters must seek permission from January 1 to ship a broad range of products, including steel used in construction, cars and consumer goods. Iron ore giants BHP and Rio Tinto advanced 0.2 per cent but Fortescue lost 2 per cent.
Gaming giant Star Entertainment jumped 4.8 per cent after it announced Bruce Mathieson Jr would become its new executive chairman after the exit of Steve McCann as chief executive.
Rollercoaster stock Droneshield surged 17 per cent after the defence technology provider said it received a contract worth $49.6 million to provide handheld counter-drone systems, accessories and software updates to a European reseller supplying a military customer in the region.
On Wall Street overnight, the S&P 500 slipped 0.2 per cent, even though more stocks rose than fell within the index. The Dow Jones edged down 0.1 per cent, and the Nasdaq composite fell 0.6 per cent.
Helping to keep the US market in check were stocks in the artificial-intelligence industry, which were mixed following their dramatic price swings last week.
Nvidia, the chip company that’s become the face of the AI boom, rose 0.7 per cent. It was one of the strongest forces pushing upward on the S&P 500 Monday after dropping 4.1 per cent last week.
But Oracle sank another 2.7 per cent following its 12.7 per cent tumble last week, which was its worst in more than seven years. Broadcom fell 4.5 per cent.
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AI stocks have been shaky on worries that all the billions of dollars flowing into chips and data centres may not produce a big-enough payoff of profits and productivity to make it worth it. The doubts are causing cracks for the industry, whose earlier surges was the main driver for the US market’s rally to records.
Besides AI, the main focus on Wall Street this week will be what several big updates on the US economy’s health say.
On Tuesday [early Wednesday AEDT] will come the jobs report for November, and economists expect it to show employers added 40,000 more jobs than they cut during the month. Thursday [early Friday AEDT] will bring an update on the inflation that US consumers are feeling, and economists expect it to show inflation was at 3.1 per cent last month, still higher than households and policymakers would like.
Such data is under the microscope because the Federal Reserve is trying to figure out if a slowing job market or high inflation is the bigger problem for the economy. The Fed is in a potentially tough spot because fixing one of those problems by moving interest rates would likely worsen the other in the short term.
The hope on Wall Street is that the job market weakens, but only by a little: enough to get the Fed to lower interest rates but not so much that a recession swamps the economy. Wall Street loves lower rates because they can give the economy and prices for investments a boost, even if they also may worsen inflation.
“With the Fed still appearing to be more focused on labor-market weakness than inflation, we’re likely facing a ‘bad news is good’ scenario for the jobs report,” according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
“As long as the numbers don’t suggest employment is falling off a cliff,” that would mean the market would likely welcome soft numbers, he said.
The spotlight will be brightest on the unemployment rate, not the overall job growth numbers because the latter is under pressure from a drop-off in immigrant workers. Economists expect the report to show the unemployment rate at 4.4 per cent, which would keep it near its highest and worst level since 2021.
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