Morning Wrap: ASX 200 to fall, S&P 500 nears four-month low, Oil prices set to extend gains

ASX 200 futures are down 61 pts (-0.71%) as of 8:30 am AEDT.

In a nutshell:

• Local sharemarket set to undercut last Monday's low and potentially hit a fresh year-to-date low

• Major US benchmarks lower amid hawkish Iran takeaways – no clear path to de-escalation, continued upward pressure on oil prices, energy supply (as well as fertilisers and helium) remain under pressure

• US bombed Iran's Kharg Island, a key energy hub, over the weekend, with oil prices likely to gap up 4-5% at the open this morning

Let's dive in.

Overnight Summary

Mon 16 Mar 26, 8:23am (AEST)

Name	Value	% Chg
Major Indices
S&P 500	6,632	-0.61%
Dow Jones	46,558	-0.26%
NASDAQ Comp	22,105	-0.93%
Russell 2000	2,480	-0.36%
Country Indices
Canada	32,542	-0.91%
China	4,095	-0.81%
Germany	23,447	-0.60%
Hong Kong	25,466	-0.98%
India	74,564	-1.93%
Japan	53,820	-1.16%
United Kingdom	10,261	-0.43%

Name	Value	% Chg
Commodities (USD)
Gold	5,022.11	-1.12%
Copper	5.71	-1.89%
WTI Oil	98.71	+3.11%
Currency
AUD/USD	0.6993	+0.18%
Cryptocurrency
Bitcoin (USD)	71,732	+1.36%
Ethereum (AUD)	3,048	+2.19%
Miscellaneous
US 10 Yr T-bond	4.285	+0.28%
VIX	27.19	-0.37%

S&P 500 SESSION CHART

S&P 500 lower, finished near worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks lower, reversed early gains to close near worst levels

• S&P 500 briefly up as much as 0.91%, faded on hawkish Iran updates, closed at the lowest since Nov-25

• Brent up 3.0% to US$99.30 a barrel, the highest since Aug-22, while most other base and industrial metals closed 1-4% lower

• Friday’s downside drivers – Continued lack of clarity around Iran off ramp, reports that Pentagon is deploying a Marine expeditionary unit to the Middle East, persistent oil production shutdowns continue to boost energy security and inflation concerns

• Market now pricing in just ~20 bps of Fed rate cuts by year end, likelihood of two 25 bp cuts down to ~19.8% vs. 30.2% a month ago

• US weekly recap: Nasdaq (-1.26%), S&P 500 (-1.60%), Russell 2000 (-1.79%), Dow (-1.99%)

• Geopolitical instability compels investors to seek new hedges (BBG)

• Treasury market volatility reaches nine-month high amid escalating geopolitical tensions (BBG)

• Rising oil prices threaten to erase US bond market gains for the year (BBG)

• Japanese yen approaches 160 without triggering intervention concerns (NK)

ENERGY

• Iran may demand Chinese yuan for oil passage through Strait of Hormuz (SCMP)

• Food crops are becoming increasingly vulnerable to the energy supply crunch caused by war (BBG)

• Strait of Hormuz open to everyone but US and Israel, says Iranian FM Araghchi (JP)

• Aluminum Bahrain suspends 19% of total production capacity as Hormuz disrupts supplies (RT)

• Asia is looking to the US as an energy supplier to reduce dependence on the Middle East (BBG)

• Iran approves passage for two Indian LPG tankers through Strait of Hormuz (ET)

• Crude oil supply cuts are on track to reach nearly 12mbpd day by the end of next week (RT)

• Brent to average above US$100 a barrel in March, according to Goldman Sachs (YF)

• Saudi Arabia has reportedly cut oil output 20% to 8 million bpd due to Iran conflict (RT)

• US shipping waivers and strategic oil releases will not significantly alleviate rising fuel costs (BBG)

• Gulf states lose US$15bn in energy revenues as Strait of Hormuz shutdown impacts oil exports (FT)

• US heating oil prices soar to multi-month highs (BBG)

• Qatar's LNG production halt due to Middle East conflict causes helium prices to double (RT)

• European governments face limited fiscal capacity to mitigate new energy price shocks (RT)

IRAN

• US bombs Kharg Island, Iran's critical oil hub; Trump warns more strikes to come (CNBC)

• Trump says Iran is ready to negotiate a ceasefire but 'terms not good enough' (NBC)

• Israel says it is planning for at least three more weeks of military campaign in Iran (CNN)

• Marine expeditionary unit with 2,200 Marines aboard is being ordered to the Middle East (ABC)

• Trump says US will be hitting Iran hard over 'next week' (AlA)

• Iran has been emboldened by its ability to rattle the global economy, laying out steep preconditions for talks (WSJ)

• Trump's private G7 claims about Iran's imminent surrender contradict on-the-ground realities (AX)

• US munitions rapidly depleted, raising concerns over sustained conflict costs (FT)

• Houthi involvement in the Iran conflict could significantly disrupt global shipping and challenge US military operations (AX)

STOCKS

• Meta reportedly planning to lay off 20% of its staff to offset AI investments (FOB)

• Apple reduces app store commissions in China following regulatory pressure (RT)

• Adobe's long-serving CEO to step down after 18 years, amid investor concerns over AI strategy (TI)

• Oracle offers complimentary AI functionalities to combat slowing SaaS growth (TI)

• Tesla's China-made EV sales surge in early 2026, outpacing BYD's decline (CNBC)

• Amazon reportedly shifts Prime Day to June, aiming to boost Q2 sales and counter retail rivals (RT)

• Glencore eyes renewed Rio Tinto merger talks as coal price surge shifts valuation dynamics (RT)

TARIFFS

• US initiates new Section 301(b) investigations into 60 economies, looking for imports made with forced labour (CNBC)

• US and China to discuss trade, fentanyl, and Taiwan at upcoming summit (BBG)

• Canada and Mexico prioritise trilateral trade agreement amid US bilateral deal interest (RT)

• US-EU trade tensions escalate as Washington expresses frustration over stalled European deal implementation (POL)

• Canada commits $25.7bn to bolster Arctic defences, reducing reliance on the US (RT)

• US, Japan and EU said to soon announce critical minerals trade pact (BBG)

• Taiwanese parliament approves signing of critical US arms deals, averting procurement delays (RT)

CENTRAL BANKS

• ECB expected to hold rates steady through 2027 despite inflation concerns (BBG)

• China's central bank continues to bolster yuan amid geopolitical tensions (BBG)

ECONOMY

• US January headline and core PCE up a respective 0.4% and 0.3% month-on-month, both in-line with consensus, second read of Q4 GDP came in at 0.7% vs. 1.4% ests, downward revision reflects decrease to exports, consumer and government spending (BBG) 

• Airline ticket prices surge for spring travel amid rising jet fuel costs (WSJ)

• Middle East conflict threatens global food supply chains, driving up prices (NK)

• China's credit expansion rises in February, driven by stable lending amid slower bond sales (BBG)

• UK GDP showed zero growth in January, with flat growth from the dominant services sector (RT)

ASX TODAY

• Ora Banda signs binding ore sales agreement with Zijin, enables company to process a further ~120,000 tonnes of gold-bearing ore in Mar-Apr (OBM)

• Perseus Mining to sell 70% of its interest in Meyas Sand Project to Matrix Resources for $260m (PRU)

WHAT TO WATCH TODAY

• A lot to digest: The US bombed Iran's Kharg Island (a key oil hub) over the weekend, driving Brent futures up more than 4% to US$101 a barrel. China also abruptly sent more military aircraft over Taiwan's air defence identification zone, following an unexplained lull period.

• Central bank meetings: This week brings us six major central bank decisions (RBA, BOC, Fed, BoJ, BoE and ECB), all of which are expected to hold ... except the RBA.

• Resources smashed: A rather heavy overnight session for all things commodities (ex-energy/agri). Most of our resource-related overnight ETFs fell 2-5%, with a notable decline for gold miners (-6.0%). The Iran conflict has flipped the narrative for miners amid a weakening global economic growth outlook, increasingly hawkish interest rate forecasts and cost inflation concerns.

BROKER MOVES

• Alcoa Corp upgraded to Neutral from Underweight; target up to US$68 from US$50 (JPM)

• Northern Star Resources downgraded to Neutral from Overweight; target cut to $24 from $39 (JPM)

• Stockland downgraded to Equal-weight from Overweight; target cut to $5.50 from $6.60 (MS)

Stocks trading ex-dividend: 

• Mon 16 Mar: Austin Engineering (ANG) – $0.003, Capricorn Metals (CMM) – $0.05, Chorus (CNU) – $0.173, Comms Group (CCG) – $0.001, Data#3 (DTL) – $0.135, FFI Holdings (FFI) – $0.10, HUB24 (HUB) – $0.36, Kingsgate Consolidated (KCN) – $0.10, Pengana Capital Group (PCG) – $0.025, Plato Income Maximiser (PL8) – $0.006, Po Valley Energy (PVE) – $0.00, Ramelius Resources (RMS) – $0.03, Spheria Emerging Companies (SEC) – $0.013, Wam Income Maximiser (WMX) – $0.006, Whitefield Income (WHI) – $0.009

• Tue 17 Mar: Credit Corp Group (CCP) – $0.32, Duratec (DUR) – $0.018, Reece (REH) – $0.054, Seek (SEK) – $0.27

• Wed 18 Mar: Adrad Holdings (AHL) – $0.014, Auckland International Airport (AIA) – $0.055, Brisbane Broncos (BBL) – $0.03, Cti Logistics (CLX) – $0.06, LGI (LGI) – $0.013, Supply Network (SNL) – $0.36

Other ASX corporate actions today:       

• Dividends paid: Centrepoint Alliance (CAF), Fiducian Group (FID)

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

• 1:00 pm: China Industrial Production

• 1:00 pm: China Retail Sales

• 1:00 pm: China Fixed Asset Investment

• 1:00 pm: China Unemployment

• 11:30 pm: Canada Inflation