Outlook for the day: Positive as gains in oil, gold, iron ore and uranium help offset Wall Street's first loss in four sessions.
ASX futures: up 20 points or 0.23%
Overnight themes:
US stocks broke a three-session winning run as heightened tensions in the Middle East and questions about the latest trade deal with China overshadowed mild inflation data.
The S&P 500 fell away in afternoon trade to a loss of 0.27% after Reuters reported the US was preparing to partly evacuate its embassy in Iraq and other regional centres as nuclear talks with Iran floundered. The Nasdaq Composite dropped 0.5%. The Dow finished near flat.
Oil and gold surged and stocks retreated after several sources told Reuters the US was making plans to remove staff ahead of possible attacks in the Middle East. The latest development came after Iran's Minister of Defence said Tehran will attack US bases in the region if nuclear talks fail and conflict with the US breaks out. "If a conflict is imposed on us… all US bases are within our reach and we will boldly target them in host countries,” Defence Minister Aziz Nasirzadeh told reporters. US President Donald Trump later said he was less confident about reaching a nuclear deal with Iran.
Oil surged to its highest in more than two months. Brent crude settled US$2.90 or 4.34% higher at US$69.77 a barrel and was lately trading above US$70.
"The market wasn't expecting this big geopolitical risk," Phil Flynn, analyst at Price Futures Group, told Reuters.
Earlier, stocks rose as mild May inflation data soothed fears that tariff hikes would rekindle inflation. The consumer price index ticked up 0.1% - less than the 0.2% forecast by economists. Core inflation also increased by a smaller-than-expected 0.1%. Headline annual inflation eased to 2.4%.
“Inflation in May was lower than anticipated, suggesting the tariffs aren’t having a large immediate impact because companies have been using existing inventories or slowly adjusting prices due to uncertain demand,” Alexandra Wilson-Elizondo, global co-CIO of multi-asset solutions at Goldman Sachs Asset Management, told CNBC.
President Trump declared a US-China trade deal was "done" following two days of negotiations in China. Talks ended with the two sides agreeing on a "framework" to enact the terms of a temporary trade truce declared earlier this year. "The worst-case scenario is probably behind us. There's a little bit of face-saving for both sides," John Praveen, managing director at Paleo Leon, told Reuters. "They got an agreement. The question is whether it will be implemented."
Energy was the only S&P sector to post a gain of any size, rising 1.49%. Utilities, health and industrials gained less than 0.1%. Materials declined 0.98%.
Gold - a traditional haven in times of geopolitical stress - kicked higher following the Middle East news. Spot gold was lately up up US$26.84 or 0.81% to US$3,354.87 an ounce. Earlier, US gold futures settled little changed at US$3,343.70.
Iron ore prices rebounded as traders welcomed the latest US-China trade agreement. Benchmark ore on the Dalian Commodity Exchange climbed 1% to US$98.39 a metric ton. Investors in industrial metals were more sceptical about a deal that some critics said amounted to little more than an agreement to enact what the two sides had previously agreed, then reneged on. Benchmark copper on the London Metal Exchange dropped 1.12% to US$9,647 a metric ton. Nickel, zinc and tin also declined. Aluminium and lead rose.
"It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement," Carol Kong, currency strategist, Commonwealth Bank of Australia, told Reuters. "That sort of comprehensive deal usually takes years to be reached, so I'm sceptical that a framework reached at the meeting in London will be comprehensive."
An index of US uranium miners hit an 11-year high following a string of positive developments this year, including industry support from the White House and news last week that Facebook owner Meta Platforms signed a 20-year deal with Constellation Energy to power for its AI data centres. “This transaction also follows similar nuclear-based power purchase agreements struck by Amazon, Google, Microsoft, etc,” Canaccord Genuity analyst James Bullen said. The Global X Uranium exchange traded fund jumped 5.35% to a level last seen in January 2014.
Key events today:
US wholesale inflation (PPI) - tonight
US unemployment benefit claims - tonight
S&P 500: down 17 points or 0.27%
Dow: down 1 point or less than 0.01%
Nasdaq: down 99 points or 0.5%
VIX: up 1.83% to 17.26
US 10-year treasury yield: down 5.3 points to 4.427%
Dollar: down 0.38% to 65.04 US cents
Iron ore (Dalian): up 1% to US$98.39
Brent crude: up US$2.90 or 4.34% to US$69.77
Gold (futures): up 30 US cents or less than 0.01% to US$3,343.70
Gold (spot): up US$26.84 or 0.81% to US$3,354.87
Silver (spot): US cents or % to US$
Palladium (spot): US$ or % to US$
Antimony (China ore): down 0.05% to US$20,329
NYSE Arca Gold Bugs: up 0.84%
Bitcoin: down 0.79% to US$108,897
Copper (LME): down 1.12% to US$9,647
Nickel (LME): down 1.21% to US$15,145
Lithium carbonate (China spot battery grade): up 0.2% to 7,431 yuan
Global X Lithium & Battery Tech ETF: up 0.58%
Uranium (spot): steady at US$70.13
Global X Uranium ETF(URA): up 5.35%
BHP: down 0.53% (US); up 0.11% (UK)
