Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq rebound from worst day of the year

In a nutshell:

• Wall Street mixed, with the S&P 500 and Nasdaq slightly higher, but Dow lower on weak breadth

• Friday's rout (Nasdaq down 4.18%, worst since April 2025) followed a hot May jobs report that pushed traders to price in a possible Fed hike

• US 2-year yield jumped 10 bps on the jobs report, with Fed funds futures pricing in 21 bps of hikes by year-end (vs. 13 bps prior to the report)

• Oil whipsawed on the first direct Israel-Iran exchange since April, Brent near US$94 after touching ~$98, before Iran halted strikes

• Note: ASX was closed Monday for the public holiday, so Friday's US session context is included below

Let's dive in.

• Major US benchmarks mixed and finished off best levels

• S&P 500 up as much as 1.13% in early trade, finished up just 0.30%

• Breadth was negative, with only three sectors higher, Equal-weight S&P 500 (-0.11%) underperforming and Dow (-0.16%) lower

• Last Friday’s session: S&P 500 (-2.6%), Dow (-1.35%) and Nasdaq (-4.1%) tumbled after a stronger-than-expected jobs report drove bond yields 4-10 bps higher across the curve, with the US 2-year (so short-term rate expectations) closing at the highest since Feb-25

• Commodities sold off sharply last Friday, with copper down 3.8% and gold down 3.2% (first close below the 200-day moving average since 12-Oct-23

• Despite a small overnight bounce, we’re still left with a net-negative lead (e.g. S&P 500 down 2.3% over the last two sessions)

• Flood of mega-IPOs, equity offerings raise concerns of whether there will be more sellers than buyers (BBG)

• KOSPI tumbles 8.2% , triggering trading halt as investors dump tech stocks amid inflation concerns (BBG)

• Market downturn has Wall Street preparing for challenges from rising inflation and SpaceX IPO (lWSJ)

• Wall Street strategists remain optimistic despite Friday's tech selloff, expecting earnings growth to sustain stocks (BBG)

• Nvidia's Huang views global tech stock selloff as a buying opportunity (BBG)

• Citigroup raised its S&P 500 target to 8,100 from 7,700, citing stronger earnings forecasts and continued AI investment (YF)

• JPMorgan sees market remaining choppy in near-term as traders take profits from Big Tech holdings (BBG)

• BofA strategists say there are too many red flags, advise investors to take profits (BBG)

• BMO Capital Markets analysts say US dollar cleanest way to take position on new regime of higher rates, inflation (BBG)

• Israel halted attacks on Iran, PM Netanyahu said, stopping short of acknowledging a ceasefire that Trump said both countries were aiming for (CNN)

• Israel and Iran appeared to pause strikes after trading fire for the first time since 8-Apr ceasefire, straining peace talks (BBG)

• Tehran warned its attacks would resume if Israel struck southern Lebanon (CNN)

• Iran's military told CNBC it had ceased strikes against Israel, but warned it would resume hostilities if Jerusalem continued operations in Lebanon (CNBC)

• Qatar's LNG tanker transits Strait of Hormuz despite latest rise in tensions (BBG)

• Saudi Arabia cuts official selling prices to Asia again, though they remain near long-time highs (BBG)

• China's LNG imports rising sharply to meet increased electricity consumption during hot summer months (BBG)

• Orders for new oil supertankers surpass 2008 boom, raise concerns about potential glut (BBG)

• SpaceX's IPO said to be well oversubscribed; order books to close Wednesday afternoon (BBG)

• Micron bounced 9,8% after sliding 13% on Friday, leading a rebound across the chip complex (YF)

• Nvidia is evaluating whether Intel's technology could be used to produce a processor combining four graphics chips into a single unit, the Information reported, though no order has been placed (YF)

• Apple opened its Worldwide Developers Conference, Tim Cook's last as CEO, with an AI-infused version of Siri expected as the headline (YF)

• Trump tells reporters US taking a small ownership stake in AI giants could be "a beautiful thing" (AX)

• Google orders 3M AI chips from Intel for 2028 production as TSMC struggles to meet demand (QZ)

• US officials debate whether looser China tech curbs enabled Chinese tech firms to acquire Nvidia Blackwell chips (BBG)

• China strengthening barriers to prevent capital and technology outflow, enforcing stricter national security screening (NYT)

• Fed Daly says policy in good place, not possible to give rate guidance amid uncertainty (BBG)

• Trump says there is no reason to hike rates, and that rates should instead be lowered (BBG)

• Markets await Thursday’s US May CPI, with consensus pointing to headline inflation accelerating from 3.8% to 4.2% year-on-year and core CPI edging up from 2.8% to 2.9% (YF)

• ECB and Bank of Canada both meet this week, with focus on how much of the recent oil shock feeds into inflation (YF)

• Economists say ECB expected to hike rates twice this year due to Iran war (BBG)

• India's central bank holds rates amid Iran crisis, lowers growth forecast to 6.6% and raises inflation forecast (NK)

• US May nonfarm payrolls printed 172,000 vs. 86,000 ests, prior two months also revised up by 93,000, with the three-month average at the highest since Mar-24, unemployment rate of 4.3% in-line with consensus and April levels (BBG)

• A Philadelphia Fed Survey projected US consumer price inflation hitting 6% in the second quarter, up sharply from a 2.7% estimate three months earlier, driven by the energy shock (CNBC)

• Eurozone economy contracted in Q1 due to declines in Ireland and France (BBG)

• ASX 200 rebalance effective prior open on 22-Jun

  • Additions: Elevra Lithium (ELV), Electro Optic Systems (EOS), FireFly Metals (FFM), Kingsgate Consolidated (KCN), Minerals 260 (MI6)

  • Removals: Guzman Y Gomez (GYG), IDP Education (IEL), SiteMinder (SDR), Temple & Webster (TPW), WEB Travel Group (WEB)

• Helloworld guides FY26 adjusted EBITDA of $57-62m vs. prior $64-72m guidance, Q4 forward air sales down 4% year-on-year in Australia and New Zealand (HLO)

• Navigator Global Investments CEO Stephen Darke discloses purchase of ~31,000 shares, owns 287k shares after the transaction (NGI)

• oOh!Media received a non-binding bid from Bain, unclear what the price was, or if granted due diligence similar to PEP or Squared Capital (AFR)

• Weebit Nano CEO Jacob Hanoch discloses sale of ~225,000 shares, beneficially owns 1.3m shares after the selldown (WBT)

• Net negative: The ASX 200 was already down 1.8% across the last two sessions, and a massive Wall Street selloff last Friday plus a mixed overnight move leaves a net-negative lead in. Commodities have traded broadly lower, with copper, gold, aluminium and palladium all down over the past two sessions. NYSE-listed BHP shares are off 5.7% since Thursday, implying a ~$59.42 open (a ~2.7% fall). Our overnight ETF watchlist recorded sharp declines on Friday: VanEck Gold Miners down 8.7%, Rare Earth/Strategic Metals down 8.6% and Copper Miners down 10.2%. Aussie yields ticked higher after the US jobs print, with 2- and 10-year yields up 5-6 bps over the two days, though still largely rangebound. Overall, markets are entering a challenged stretch where everything reads bearish and the path of least resistance is lower. US stocks found slight reprieve overnight, so watch for either a meaningful/sustained bounce or markets undercutting recent lows and inflicting further damage.

Broker data is currently pending. Check the Evening Wrap for a full breakdown of today's analyst updates.

Stocks trading ex-dividend: 

• Mon 8 Jun: None

• Tue 9 Jun: Infratil (IFT) – $0.095, Whitefield Income (WHI) – $0.006

• Wed 10 Jun: Tower (TWR) – $0.041, WCM Global Growth (WQG) – $0.022

• Thu 11 Jun: Champion Iron (CIA) – $0.02, Future Generation Global (FGG) – $0.03, Sandon Capital (SNC) – $0.005

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

No major economic announcements.