Morning Wrap: ASX 200 to enter correction territory, S&P 500 and Nasdaq tumble as yields surge

ASX 200 futures are down 156 pts (-1.86%) as of 8:30 am AEDT.

In a nutshell:

• The local sharemarket is set to open near a fresh 10-month low, potentially entering correction territory

• US indices dropped sharply overnight as bond yields jumped broadly, with the 10-year yield climbing 13 bps to its highest level since August 2025

• Gold closed out the week down 10.5%, its worst weekly selloff since 1983, far exceeding the 8–9% declines seen during the pandemic and GFC

• The Iran conflict remains volatile after a flurry of mixed remarks from Trump over the weekend that pointed to both de-escalation and escalation

Let's dive in.

Overnight Summary

Mon 23 Mar 26, 8:24am (AEST)

Name	Value	% Chg
Major Indices
S&P 500	6,506	-1.51%
Dow Jones	45,577	-0.96%
NASDAQ Comp	21,648	-2.01%
Russell 2000	2,438	-2.26%
Country Indices
Canada	31,317	-1.69%
China	3,957	-1.24%
Germany	22,380	-2.01%
Hong Kong	25,277	-0.88%
India	74,533	+0.44%
Japan	53,373	-3.38%
United Kingdom	9,918	-1.44%

Name	Value	% Chg
Commodities (USD)
Gold	4,488.72	-3.48%
Copper	5.34	-1.67%
WTI Oil	98.23	+2.80%
Currency
AUD/USD	0.7	-0.32%
Cryptocurrency
Bitcoin (USD)	68,131	-3.24%
Ethereum (AUD)	2,935	-4.64%
Miscellaneous
US 10 Yr T-bond	4.391	+2.57%
VIX	26.78	+11.31%

S&P 500 SESSION CHART

S&P 500 trended lower to close near worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks sharply lower, closing near worst levels as the Iran war entered its fourth week 

• Fourth consecutive weekly loss for all four US indices, with the Russell 2000 being the first to enter correction territory, down over 10% from its January high 

• US weekly recap: Russell 2000 (-1.68%), S&P 500 (-1.90%), Nasdaq (-2.07%), Dow (-2.11%)

• Big risk-off move amid a sharp spike in bond yields, with the US 10-year  yield up 13 bps to the highest since Aug-25, Aussie 10-year also up 6 bps to 5.06% or the highest since Jun-11

• Uncertainty around the duration of the Iran conflict continues to be the main drag on sentiment, with the White House considering occupying Kharg Island and deploying thousands more troops in the region

• Brent settled 1.8% higher to US$109.56 a barrel after Iraq declared force majeure on foreign oil fields

• Gold finished the week down 10.5%, its largest weekly decline since 1983

• Correlation between Mag 7 and equal-weight S&P 500 turns negative, potentially sets stage for Big Tech to re-establish market leadership (BBG)

• International stocks have underperformed US shares since start of Iran war, reversing recent outperformance (WSJ)

• Money market fund assets reach record $8tn as investors seek safety amid war, oil price, inflation fears (RT)

• Blackstone's flagship private credit fund posts loss in February, first in over three years (RT)

• BofA's Flow Show report notes investors buy the dip in both stocks and bond despite rising energy costs from Iran conflict (RT)

ENERGY

• Saudis believe oil could surge past US$180 if disruptions in the region persist until late April (WSJ)

• Global LNG market facing supply cliff in next 10 days as final tankers from Middle East reach their destinations (FT)

• European Commission urges members to lower gas storage targets, gradually begin filling reserves in effort to reduce demand (FT)

• White House mulls occupation of Iran's Kharg Island to pressure Tehran to reopen Strait of Hormuz (AX)

• Iran strike on Ras Laffan LNG plant will cost Qatar Energy $20bn annually in sales losses (BBG)

• LNG importers look to US suppliers following Iran's latest attack on Qatar energy facilities (BBG)

• Trump administration rules out oil export ban amid price surge, but industry fears potential panic actions (FT)

• Iran permits select ships through the Strait of Hormuz to demonstrate dominance and reduce diplomatic isolation (FT )

• Asia buys most US oil in three years as Strait of Hormuz crisis spurs demand for alternative supplies (BBG)

IRAN

• Trump says US getting very close to meeting objectives, White House considering winding down Iran war (AX)

• Trump on Sunday threatens to strike Iranian power plants if Iran does not reopen Strait of Hormuz within 48 hours (RT)

• Iran threatens retaliation if energy facilities attacked, says it will strike US and Israeli allies' energy infrastructure in the region (NYT)

• Israeli defence minister says attacks on Iran to escalate significantly this week (NYT)

• Iran penetrates Israeli defences with missile strike eight miles from main nuclear research facility (NYT)

• Iran fires missiles toward UK-US Diego Garcia Military base in Indian Ocean, attack thwarted but demonstrates longer-distance capability than previously known (NBC)

• Iran says Strait of Hormuz open to all traffic except ships linked to "enemies" (NYT)

• Iran says country ready to help Japanese ships pass through Strait of Hormuz (NYT)

• Analysts warn even if Trump declares victory, a vengeful Iranian regime likely to create permanent regional instability (FT)

STOCKS

• FedEx beats Q3 expectations and upgrades full-year guidance, flags greater cost savings, expects Iran conflict to have muted impact, shares rally as much as 7.5% but finish the session up just 0.7% (CNBC)

• Super Micro Computer plunged 33% on Friday after co-founder Wally Liaw and two others were charged with smuggling US$2.5bn worth of Nvidia-powered servers to China (CNBC)

• OpenAI has retreated from some hefty spending plans, shelved some projects in recent months as it prepares for IPO (CNBC)

• United Airlines to cut 5% of planned capacity this year, planning for oil to remain above US$100 until end of 2027 (RT)

• US fertiliser executives have sold more than $30m of own shares since start of war as shares spike (FT)

• Amazon's Jeff Bezos in talks to raise $100bn for fund to buy manufacturing companies and speed their path to automation (WSJ)

TARIFFS

• China orders limits on exports of fertiliser, jet fuel and diesel (RT)

• Japan agrees on US$73bn of US investments in second phase, focused on nuclear reactors and gas plants (NK)

CENTRAL BANKS

• Fed's next move could be a hike as inflation remains above target, oil prices higher, and rates lower than when Fed started easing in 2024 (WSJ)

• Shin Huyn Song nominated as next head of Bank of Korea (BBG)

• Fed Bowman says she still sees three rate cuts before year-end, still expects strong economic growth (RT)

• Fed Governor Waller says he is cautious but still believes cuts are possible later this year the labour market continues to weaken and inflation remains under control (CNBC)

• China keeps loan prime rates unchanged as expected, Middle East conflict pushes out rate cut expectations (RT)

ECONOMY

• War creating major disruptions in nitrogen-based crop nutrients, raising concerns over inflation, food security (BBG)

ASX TODAY

• Macquarie reportedly in discussions with Chinese fund for potential sale of its £1bn stake in UK gas network (FT)

WHAT TO WATCH TODAY

• Blood on the streets: Just when you thought things couldn't get worse, ASX futures are pointing to a 1.86% decline to kick off your Monday, implying the market will be down just over 10% from its 2 March peak, tipping into technical correction territory. Overnight, Trump attempted to serve up a giant Taco, but the Iranians didn't bite. Markets continue to price in growing war-driven inflation fears, with bond yields surging globally to uncomfortable levels. CME's FedWatch Tool now shows a 26.5% chance of a 25 bp Fed rate hike by year-end, up from 0% just a week ago. Yield-sensitive sectors like Utilities, Real Estate and Tech led the losses on Wall Street, falling 2–4%. Most ETFs on our overnight watchlist were down 2–5%, with resource-related names hit by a double whammy of lower commodity prices and higher input costs.

BROKER MOVES

• Hub24 upgraded to Outperform from Neutral; but target lowered to $92.25 from $106.10 (Macquarie)

• Magellan Financial Group downgraded to Underperform from Neutral; target cut to $8.55 from $8.65 (Macquarie)

• NAB downgraded to Neutral from Outperform; target cut to $45.50 from $47 (Macquarie)

Stocks trading ex-dividend:

• Mon 23 Mar: Cedar Woods Properties (CWP) – $0.14, Lycopodium (LYL) – $0.22, NRW Holdings (NWH) – $0.085, Cash Converters International (CCV) – $0.01

• Tue 24 Mar: Civmec (CVL) – $0.025, Fat Prophets Global Contrarian Fund (FPC) – $0.02

• Wed 25 Mar: Flight Centre Travel Group (FLT) – $0.12, Naos Emerging Opportunities Company (NCC) – $0.021, Perenti (PRN) – $0.033, Service Stream (SSM) – $0.03

• Thu 26 Mar: Ipd Group (IPG) – $0.068, Salter Brothers Emerging Companies (SB2) – $0.02, Tourism Holdings Rentals (THL) – $0.025

Other ASX corporate actions today:       

• Dividends paid: ASX (ASX), Australian Ethical (AEF), Aussie Broadband (ABB), Embark Early Education (EVO)

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

No major economic announcements.