The ASX will follow a weak session from Wall Street, which saw the S&P 500 dropping 0.8% (the third day in a row that the benchmark US stock index has fallen).<\/p>\n
And it’s not because of the latest headlines on oil prices and the US-Israeli war against Iran this time.<\/p>\n
On that note, Donald Trump told reporters the US might have to give Iran “another big hit” if it doesn’t agree on a peace deal \u2014 and that he had been an hour away from ordering an attack before postponing it.<\/p>\n
Those mixed signals from the US president led to the price of Brent crude futures falling 1.1% to $US100.84 per barrel, which is still very high.<\/p>\n
US bond sell-off<\/p>\n
What appears to have spooked the share market is a bond sell-off (of all things), which has pushed government bond yields higher.<\/p>\n
Basically, the yield is the return that investors expect from lending money to the US government.<\/p>\n
When a government wants to raise extra funds, it issues new debt \u2014 in the form of bonds (which are kind of like an ‘IOU’).\u00a0 <\/p>\n
The price of a bond and its yield (return) move in opposite directions. (ie. when people sell their bonds, the interest rate goes up)<\/p>\n
Overnight, the US 30-year Treasury yield jumped as high as 5.2%, its highest level in 19 years, while the 10-year yield rose to 4.69%, its highest since January 2025.<\/p>\n
The 10-year yield, in particular, is used to gauge mortgage, car loans and credit card interest rates for consumers (ie, they’re heading higher).<\/p>\n
It seems US investors are now worried the war against Iran (and oil shock) will drive up inflation, which will probably curb inflation and put a dent in corporate profits, raising questions about the sky-high valuations of some key stocks (in particular, the high-flying tech giants investing heavily in AI).<\/p>\n","protected":false},"excerpt":{"rendered":"The ASX will follow a weak session from Wall Street, which saw the S&P 500 dropping 0.8% (the…\n","protected":false},"author":2,"featured_media":681827,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[2001,64,29217,63,99,2003,2005,5284,171,2007,19136,2008,5463,29218,1491],"class_list":["post-681826","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-asx","tag-au","tag-aud","tag-australia","tag-business","tag-dollar","tag-dow-jones","tag-gold","tag-markets","tag-nasdaq","tag-oil","tag-sp","tag-sp-500","tag-usd","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/681826","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=681826"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/681826\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/681827"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=681826"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=681826"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=681826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}