Morning Wrap: ASX 200 to fall, S&P 500 dips on AI disruption fears, Gold and silver prices tumble

ASX 200 futures are down 67 pts (-0.75%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks broadly lower and finished near worst levels

• Risk-off session, with Mag-7 stocks trading sharply lower amid continued capex and cash flow concerns, software stocks continue to tumble into oblivion and now AI fears spreading to trucking and logistics

• Commodity prices experienced a broad and abrupt selloff around ~3 am AEDT, driving resource stocks sharply lower

Let's dive in.

Overnight Summary

Fri 13 Feb 26, 8:21am (AEST)

Name	Value	% Chg
Major Indices
S&P 500	6,833	-1.57%
Dow Jones	49,452	-1.34%
NASDAQ Comp	22,597	-2.03%
Russell 2000	2,611	-2.19%
Country Indices
Canada	32,465	-2.37%
China	4,134	+0.14%
Germany	24,853	-0.01%
Hong Kong	27,033	-0.86%
India	83,675	-0.66%
Japan	57,640	-0.02%
United Kingdom	10,402	-0.67%

Name	Value	% Chg
Commodities (USD)
Gold	4,917.13	-3.30%
Copper	5.767	-3.33%
WTI Oil	62.89	-2.69%
Currency
AUD/USD	0.7089	-0.54%
Cryptocurrency
Bitcoin (USD)	65,546	-2.82%
Ethereum (AUD)	2,708	-1.71%
Miscellaneous
US 10 Yr T-bond	4.104	-1.63%
VIX	21.19	+20.05%

S&P 500 SESSION CHART

S&P 500 lower, closed at worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks lower, reversing earlier gains and closing near worst levels

• Very risk-off themed session, with Big Tech broadly lower, notably Apple (-5.0%), Broadcom (-3.3%), Meta (-2.8%) and Tesla (-2.6%)

• Mag-7 underperformance continued amid massive year-on-year increases to capex guidance, shift from asset-light to asset-heavy and minimal cash flows

• Software stocks still dead in the water, but now AI fears spreading to insurance brokers, trucking/logistics and more

• Commodity prices experienced an abrupt crash around 3:00 AEDT, with silver prices down ~10% in less than an hour

• Commercial real estate stocks decline again over AI disruption fears (FT)

• Recent volatility deflating optimism about US IPO market (BBG)

• Trucking and logistics smashed amid concerns about AI freight scaling tool (CNBC)

• BofA says energy sector is in a rotational bull market driven by a shift away from large-cap tech (YF)

• Corporate bond spreads fall to record lows, prompting bubble warnings (FT)

• IEA anticipates oil supply rebound after US winter storm cuts output by 1.2mbpd (WSJ)

STOCKS

• McDonald's posts stronger-than-expected sales growth, benefiting from value meals for cash-strapped consumers, shares rally 2.7% to all-time highs (NYT)

• FedEx reveals at Investor Day 14% profit growth target in 3-year strategy (FW)

• Anthropic closed $30bn funding round at a $380bn post-money valuation (CNBC)

• Aramco signs MOU with Microsoft to advance industrial AI deployment in Saudi Arabia (WSJ)

• Wells Fargo says Trump's tariffs on foreign imports of steel will fuel M&A in the US metals industry this year (BBG)

• BBC plans to slash more than £600m from its annual budget in a move that will likely involve job cuts (TG)

• Cisco sales increase due to AI demand, but high memory costs temper investor optimism, shares dive 12.3% (CNBC)

• Birkenstock misses quarterly sales expectations due to cautious consumers and uneven demand (RT)

• Lenovo warns of pressure on PC shipments due to worsening memory-chip shortage, raises prices amid rising costs (RT)

• Mercedes-Benz reports significant full year profit decline, warns of challenging times amid competition and tariff costs (CNBC)

• Unilever warns FY26 sales growth may hit lower end of forecast due to US, Europe slowdown, though EM delivers Q4 sales beat (RT)

TARIFFS & TRADE

• US-China expected to extend trade truce during Trump's China visit (SCMP)

• Trump announces "historic" trade agreements with several countries to significantly boost US coal exports (YH)

• US and Japan nearing agreement on first three projects under Tokyo's $550bn investment fund (BBG)

• Trump's trade deal with India creates challenges for PM Modi, reducing tariffs but raising sovereignty concerns (NYT)

CENTRAL BANKS

• Fed's Schmid says further rate cuts risk allowing high inflation to persist even longer (BBG)

• RBA Governor Bullock says they are open to further hikes if inflation proves sticky (BBG)

GEOPOLITICS

• Pentagon prepares second aircraft carrier for Middle East deployment as Trump increases pressure on Iran (WSJ)

• Netanyahu says he remains skeptical of a deal with Iran (JP)

• Russia proposes broad economic partnership with Trump administration, including return to USD settlement system (BBG)

ECONOMY

• UK GDP data reveals weak economic footing in late 2025, amid stagnant services and declining business investment (RT)

ASX TODAY

• Reporting season continues to pick up – we’re transferring all the usual coverage you see here to the Live Blog.

• Soul Patts now holds ~50% of Star Entertainment’s debt (AFR)

WHAT TO WATCH TODAY

• Resources on the backfoot: Wild pullback for most commodity prices overnight (broad and sharp selling at ~3:00 am), taking the life out of resource-related equities. Most of our overnight ETF watchlist down 3-7%, most notably Gold, Nickel and Rare Earths/Strategic Metals. My two cents is that commodities remain relatively constructive, but volatility is elevated amid i) very extended (e.g. gold is ~18% above its 200-day moving average); ii) CME continues to hike margins; iii) increase speculation (e.g. China's Bian Ximing opened a US$300m silver short last week) and more.

• Day twos: TPW (-32.6%), AMP (-26.6%) and PME (-23.8%) absolutely obliterated yesterday. Seeing a few brokers upgrade these stocks (but they're not really upgrades since the target price/earnings forecasts are getting slashed). Will be interesting to see how these trade.

• Software/tech: iShares Expanded Tech-Software ETF down another 2.7% overnight, trading slightly above last Friday's low. I'm keen to see how Wisetech trades amid concerns of a new AI freight scaling tool. Though most of the affected stocks on Wall Street are more so freight brokers/logistic service providers as opposed to software.

BROKER MOVES

• AMP upgraded to Outperform from Neutral; target cut to $1.80 from $1.90 (MQG)

• AMP upgraded to Buy from Neutral; target cut to $1.75 from $1.90 (UBS)

• AMP upgraded to Overweight from Neutral; target cut to $1.50 from $1.70 (JPM)

• ANZ upgraded to Overweight from Equal-weight; target up to $41.30 from $36.30 (MS)

• ASX downgraded to Neutral from Outperform; target cut to $56 from $58 (MQG)

• Temple & Webster upgraded to Buy from Neutral; target lowered to $9.50 from $15.38 (CITI)

Stocks trading ex-dividend: 

• Fri 13 Feb: Argo Investments (ARG) – $0.185, Bailador Technology (BTI) – $0.039, Plato Income Maximiser (PL8) – $0.006, Whitefield Income (WHI) – $0.006

• Mon 16 Feb: None

• Tue 17 Feb: Bravura Solutions (BVS) – $0.102, Computershare (CPU) – $0.55, Spheria Emerging Companies (SEC) – $0.013, WAM Income Maximiser (WMX) – $0.005

• Wed 18 Feb: Commonwealth Bank of Australia (CBA) – $2.35

• Thu 19 Feb: Teaminvest Private Group (TIP) – $0.015

Other ASX corporate actions today:       

• Dividends paid: Cromwell Property Group (CMW), Charter Hall Long WALE REIT (CLW), Euroz Hartleys (EZL)

• Earnings: Alkane Resources (ALK), BWP Trust (BWP), Coast Entertainment Holdings (CEH), Cochlear (COH), Dusk Group (DSK), Nick Scali (NCK)

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

• 12:00 am: US Inflation Rate (JAN)