Morning Wrap: ASX 200 to fall as S&P 500 and Nasdaq retreat from records, Copper and gold miners tumble

In a nutshell:

• Major US benchmarks finished lower but off worst levels as the S&P 500 and Nasdaq pulled back from record highs

• Fed minutes showed most officials see another rate hike by year end, with several judging current policy barely restrictive, pushing odds of a December move up to 70% up from 58% a week ago

• Brent held near US$100 a barrel Iran ramped up the pace of attacks on tankers passing through the Strait of Hormuz, with UK Maritime Trade Operations reporting at least nine attacks in the waterway

Let's dive in.

• Major US benchmarks finished lower, but off worst levels after a weaker open, as elevated oil prices and long-dated Treasury yields pulled the S&P 500 and Nasdaq back from Tuesday's record closes

• S&P 500 clawed back most of its 0.71% intraday decline thanks to some solid reversals from names like Micron (+4.0% vs. session low of -2.7%) and slight gains across megacap names like Amazon (+1.4%), Apple (+0.9%), Alphabet (+0.8%) and Microsoft (+0.1%)

• Breadth was weak, with the Equal-weight S&P 500 lagging the cap-weighted index by 61 bps, while the Russell 2000 closed at its lowest since 20 May

• US 30-year yield rose to its highest level since 2002 ahead of the release of minutes from the Fed's September meeting, when policymakers raised rates to combat inflation

• US 10-year yield was unchanged and the rate-sensitive 2-year yield lost 2bps, adding to a 15bps fall since 28 September

• Gold fell 1.2% to US$4,112/oz, adding to an 11.6% slide since the end of August, silver fell 2.4% to US$59.8/oz and copper lost 0.3% but is up 1% over the last four sessions

• Bank of America's Savita Subramanian said bonds have become a real competitor to stocks for the first time in decades, warning upbeat sentiment leaves equities vulnerable to disappointment (BBG)

• France's finance ministry said it is not changing its bond issuance strategy, after the WSJ reported Paris is weighing more short-term debt following a selloff in long-dated French bonds (BBG)

• Bitcoin fell below $83,000 as roughly $696m of positions were liquidated over 24 hours, mostly from long traders, dragging Coinbase, Robinhood and Strategy shares lower (YF)

• SpaceX shares slipped 1.3% after Bloomberg reported the company plans to raise $40bn of new debt to buy Nvidia chips, split between $10bn of bank loans and $30bn of investment-grade bonds, with Apollo leading the financing (YF)

• Corona brewer Constellation Brands Q2 FY27: net sales $2.63bn beat ests by ~4%, adjusted EPS $3.74 beat by ~5%, reaffirmed FY EPS guidance of $11.20 to $11.90, shares fell as grocery and convenience store sales declined (YF)

• Anthropic released Claude Haiku 5.5, its latest lightweight model, saying it outperforms Haiku 4.5 in coding, computer use and knowledge work at lower cost as AI pricing competition intensifies (YF)

• Iran ramped up the pace of attacks on tankers passing through the Strait of Hormuz, with UK Maritime Trade Operations reporting at least nine attacks in the waterway so far in October (BBG)

• Trump told reporters the Iran war will end "very soon" and oil prices will "drop like a rock" once the conflict is over (CBS)

• Fed minutes showed most officials judged another rate hike would likely be appropriate by year end, with several saying the current rate was not restrictive or only mildly so (YF)

• Markets priced a 68.6% chance of a Fed hike at the December meeting ahead of the minutes, CME FedWatch showed, after softer PCE and jobs data pared bets on a move this month (CNBC)

• German industrial production jumped 2% month-on-month in August, the most in 17 months and well above ests of 0.5%, as public infrastructure and defence spending fuelled a construction boom (BBG)

• A New York Fed survey showed US consumers' one-year-ahead inflation expectations hit their highest level since May 2023 (CNBC)

• West African Resources produced a record 127,950oz of gold in the September quarter and sold 135,245oz at a realised price of US$4,240/oz. Year-to-date production of 360,857oz keeps it on track for 2026 guidance of 430,000-490,000oz (WAF)

Hi there, Kerry here. Another rough day for markets, and resources copped the worst of it. Here's what I'm watching.

• Uranium giveth, uranium taketh: The Global X Uranium ETF sank 4.4%, erasing Wednesday's 4.0% rally on the back of the Google-Constellation deal. Uranium stocks seem to always trade on momentum and risk appetite, so when the broader commodity complex is getting hammered and the US dollar is surging, the sector tends to get crushed.

• Miners sold off: The US Dollar Index rose 0.4%, a move big enough to act as a wrecking ball for mining equities. The index has now rallied 3.5% since early September and is trading at its highest since April 2025. Palladium and platinum each fell 4.4%, while gold dropped 1.2% to US$4,110/oz. That drove broad weakness across our overnight resource ETFs, including Silver Miners (-3.5%), Gold Miners (-3.1%), Copper Miners (-3.1%) and Rare Earths/Strategic Metals (-2.9%). Copper equities struggled even though the metal held up relatively well, down just 0.2% to US$6.68/lb. NYSE-listed BHP shares fell 2.0% to US$85.22

• US dollar winners and losers: A December 2023 Citi study found materials and energy were the major losers in a rising US dollar environment, while staples and healthcare were the winners. Fortescue showed the strongest statistical link (the highest T-stat, at 4), followed by BHP, Rio Tinto, MinRes and CBA. On the other side, Brambles, CSL, APA, Transurban and Telstra tend to outperform

Stocks trading ex-dividend: 

• Thu 8 Oct: ARB Corporation (ARB) – $0.35, Clime Capital (CAM) – $0.014, Naos Emerging Opportunities Company (NCC) – $0.021, WAM Capital (WAM) – $0.077

• Fri 9 Oct: EQT Holdings (EQT) – $0.20

• Mon 12 Oct: Civmec (CVL) – $0.035, Washington H. Soul Pattinson (SOL) – $0.63

• Tue 13 Oct: Perenti (PRN) – $0.045, Star Combo Pharma (S66) – $0.003

• Wed 14 Oct: United Overseas Australia (UOS) – $0.02

Other ASX corporate actions today:       

• Dividends paid: Aurelia Metals (AMI), Brambles (BXB), Briscoe Group (BGP), Cleanaway Waste Management (CWY), Count (CUP), IPD Group (IPG), Medibank Private (MPL), Pacific Current Group (PAC), Pepper Money (PPM), Ventia Services Group (VNT), Westgold Resources (WGX)

• IPOs: None

• AGMs: REA Group (REA) – 9:00 am

Economic calendar (AEDT):

• No major economic events