Morning Wrap: ASX 200 to fall, S&P 500 and Nasdaq pull back from record highs, Oil and yields soar

In a nutshell:

• S&P 500 (-0.41%), Dow (-1.13%) and Nasdaq (-0.19%) broadly lower, with all sectors red except Energy

• Brent jumped 4.4% to US$114 a barrel amid Iran military escalation, which hit several ships in the Strait of Hormuz and a key UAE oil port

• Higher oil prices and inflation concerns driving bond yields higher, US 10-year up 6 bps to 4.43%, breaking out to the highest since 18-Jul-25

Let's dive in.

• Major US benchmarks pulled back from all-time highs, though off worst levels

• A relatively uneventful session, most Mag-7 names +/-1%, all sectors lower except Energy

• US 10-year yield up 6 bps to 4.43%, closing at the highest since Jul-25

• Gold sold off ~2% despite the geopolitical backdrop, with risk-off flows favouring the US dollar over bullion 

• US mortgage rates pushed back above ~6.5% for the first time in over a month, tracking the Treasury yield jump on Iran-driven inflation concerns (YF)

• European stocks drifted lower with the pan-European STOXX 600 declining modestly, while Hong Kong's Hang Seng rallied nearly 2% on tech bargain buying (STL)

• Bitcoin surges above US$80,000 for first time in over three months as Asian stocks near records (BBG)

• Brent crude jumped 4.4% to US$114 a barrel after US denied Iranian claim that a US frigate was struck near Gulf of Oman (TE)

• Iran's IRGC Navy released map designating expanded "areas of Iranian control" near the Strait of Hormuz spanning UAE ports of Fujairah and Khorfakkan and Umm Al Quwain coast (RT)

• Bessent says Iran will need to "start shutting in wells" within a week as oil storage fills with nowhere to go due to US blockade (T)

• Fujairah Oil Industry Zone hit by Iranian drone attack, critical for UAE because it sits at end of Abu Dhabi Crude Oil Pipeline that bypasses the Strait of Hormuz (RT)

• US-flagged ADNOC tanker hit by two Iranian drones in Strait of Hormuz, no injuries, UAE Foreign Ministry condemned as "terrorist attack" and act of "piracy" by IRGC (TN)

• Trump told Fox News Iran would be "blown off the face of the Earth" if it targeted US ships in Strait of Hormuz, declined to confirm if ceasefire still in place (CNN)

• Trump on Truth Social called for South Korea to join Project Freedom mission after Iranian forces fired on a South Korean cargo ship (FX)

• Maersk confirmed one of its ships traversed the Strait of Hormuz with US military protection, all crew safe (CNN)

• Palantir Q1 FY26: revenue up 85% to $1.63bn (~6% ahead of est), adjusted EPS $0.33 beat by ~18%, US commercial revenue up 133% to $595m, raised FY26 revenue guidance to $7.65–$7.66bn from $7.19bn prior (CNBC)

• Palantir Q2 revenue guide of $1.80bn at midpoint topped $1.68bn consensus by ~7%, CEO Karp said US business expected to "double again in 2027" (YF)

• Spirit Airlines ceased all global operations on Saturday after Trump administration US$500m bailout collapsed, stranding 600,000 passengers and 17,000 jobs lost, first major US airline failure in 25 years (CNN)

• Pinterest beat Q1 estimates with revenue up 18% year-on-year to $1.01bn, net loss narrowed (TS)

• Home Depot was worst Dow performer, down ~3.5%, as renewed Middle East tensions hit consumer-discretionary names (TE)

• GameStop proposes $56bn cash-and-stock deal to acquire eBay, despite having a market cap of just US$10bn (RT)

• Fed's Kashkari warns prolonged Iran war raises inflation and growth risks (RT)

• Goolsbee calls latest inflation data "bad news" for Fed and urges caution on rate cuts (RT)

• ECB's Wunsch says EU "naive" to cling to liberal economic model in changed world of US and Chinese rivalry (FT)

• Eurozone inflation to peak this year then fall back to 2% target by 2027, ECB survey shows (RT)

• RBA expected to hike cash rate on 5-May with inflation elevated (BBG)

• Powell's term as Fed chair ends 15 May, with Kevin Warsh widely expected to be confirmed as successor (CNN)

• US March factory orders rose 1.5% month-on-month vs. 0.5% ests , prior revised up to 0.3% from flat, computers and electronic products orders up 3.6% to $29.6bn, the largest monthly print since 2001 on AI-related demand (RT)

• Codan’s Pamela Wall sells $200m shares, will retain a ~$1.2bn stake post transaction (CDA)

• Medibank reports no change to FY26 outlook at Macquarie Conference, 3Q26 claims consistent with recent industry trends, strong growth continues in all three segments in Medibank health (MPL)

• Pexa reaffirms FY26 revenue guidance of $395-415m underpinned by continued market strength in Australia and disciplined cost management, core NPAT anticipated to be at the top end of guidance range (PXA)

• Pinnacle Investment Management to acquire additional 6.8% of existing equity in Metrics for $100.5m (PNI)

• Regal Partners Chair-Elect Peter Yates discloses purchase of ~84,000 shares vs. prior shareholding of nil (RPL)

• Sigma Healthcare issues Chemist Warehouse sales update, 1-Jul to 30-Apr Australian store network LFL sales growth of 14.4%, signed an MoU with Greenlight Healthcare to push CW brand into the UK market (SIG)

• SPC Global preparing to launch equity raising of between $60-70m (AFR)

• Westpac reports 1H26 revenue up 5% to $11.2bn, net profit up 3% to $3.4bn vs. $3.5bn ests, interim dividend up 1.3% to 77 cps, credit impairment provisions of $5.2bn vs. its $1.9bn base case (WBC)

• Commodities: A classic oil up, everything else (base and precious metals) down. Most resource-related overnight ETFs down 1-3%, with notable weakness for Copper Miners (-3.0%) and Rare Earths/Strategic Metals (-4.1%).

• Tech: iShares Expanded-Tech Software ETF up 2.0%, on the cusp of breaking above the 22-Apr high to hit a fresh three-month high. Chart looks surprisingly constructive. Nasdaq-listed Life360 shares up 1.1% after a 6.1% gain last Friday.

• RBA: RBA widely expected (~80%) to hike rates by 25 bps to 4.35% this afternoon. The previous hike (17-Mar) was a narrow 5-4 split, so will be interesting if we see more dissents, possibly dovish commentary.

• Accent Group downgraded to Neutral from Buy; target cut to $0.57 from $1.25 (Citi)

• Coles Group downgraded to Hold from Buy; target up to $22.80 from $22.35 (Bell Potter)

• Endeavour Group downgraded to Underweight from Neutral; target cut to $3.10 from $3.50 (JPMorgan)

Stocks trading ex-dividend: 

• Tue 5 May: None

• Wed 6 May: None

• Thu 7 May:  Om Holdings (OMH) – $0.01

• Fri 8 May: None

Other ASX corporate actions today:       

• Dividends paid: None

• IPOs: None

• Earnings: Westpac (WBC)

• AGMs: None

Economic calendar (AEST):

• 2:30 pm: RBA Interest Rate Decision (Ests: 25 bp hike to 4.35%)

• 12:00 am: US ISM Services PMI 

• 12:00 am: US JOLTs Job Openings