Morning Wrap: ASX 200 to slip, S&P 500 posts largest monthly decline since March 2025, oil prices set to soar

ASX 200 futures are down 20 pts (-0.20%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks lower but off worst levels

• Breadth was positive, with the Equal-weight S&P 500 (+0.12%) outperforming the cap-weighted benchmark by 55 bps

• Nine out of eleven sectors traded higher, offset by sharp declines for Tech (-2.1%) and Financials (-1.9%)

• US and Israel launched attacks on Iran over the weekend, with gold and oil prices expected to spike this morning

• Middle East situation remains volatile, all eyes on the Strait of Hormuz (a key route for ~20% of global oil supply), where ~250 ships have dropped anchors and Maersk has suspended all shipments through the area

Let's dive in.

Overnight Summary

Mon 02 Mar 26, 8:20am (AEST)

Name	Value	% Chg
Major Indices
S&P 500	6,879	-0.43%
Dow Jones	48,978	-1.05%
NASDAQ Comp	22,668	-0.92%
Russell 2000	2,632	-1.68%
Country Indices
Canada	34,340	-0.47%
China	4,163	+0.39%
Germany	25,284	-0.02%
Hong Kong	26,631	+0.95%
India	81,287	-1.17%
Japan	58,850	+0.16%
United Kingdom	10,911	+0.59%

Name	Value	% Chg
Commodities (USD)
Gold	5,278.01	+1.80%
Copper	6.0	+0.97%
WTI Oil	67.02	+2.78%
Currency
AUD/USD	0.7051	-0.91%
Cryptocurrency
Bitcoin (USD)	65,338	-1.72%
Ethereum (AUD)	2,715	-1.89%
Miscellaneous
US 10 Yr T-bond	3.962	-1.37%
VIX	19.86	+6.60%

S&P 500 SESSION CHART

S&P 500 lower but off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks lower but off worst levels

• US weekly recap: S&P 500 (-0.43%), Dow (-1.31%), Nasdaq (-0.95%), Russell 2000 (-1.18%)

• US monthly recap: S&P 500 (-0.87%), Dow (+0.17%), Nasdaq (-3.38%), Russell 2000 (+0.71%)

• S&P 500 and Nasdaq ended February with the largest monthly decline since Mar-25

• Though breadth was still positive, with the Equal-weight S&P 500 recording a fourth-straight month of gains and up 3.4% in February

• Another rotation into defensives, value and quality, and away from select cyclicals, small caps and pockets of the AI trade

• Today’s big story – Brent crude up ~10% to US$80 amid escalating Middle East tensions after US and Israeli strikes on Iran, Reuters reporting Iran is notifying vessels that it is closing the Strait of Hormuz (impacting a key route for ~20% of global oil supply)

• Retail traders piling into software stocks, Nvidia and Broadcom also seeing pronounced dip buying (BBG)

• Software stocks rebound as AI partnerships alleviate disruption fears (AX)

• Private credit concerns weigh on bank stocks, KBW bank index down nearly 5% Friday in biggest pullback since 'Liberation Day' (FT)

• European stock repurchases soar to unprecedented levels, surpassing US buyback activity (BBG)

STOCKS

• New Berkshire Hathaway CEO Greg Abel says massive cash holdings not a sign that the conglomerate is retreating from dealmaking (FT)

• Amazon employees highlight mounting pressure and slumping morale following big job cuts, they still don't see AI doing anyone's job (FT)

• Block to reduce workforce by almost half as company bets on AI to run more efficiently (BBG)

• Warner Bros. Discovery board deems Paramount Skydance revised acquisition offer superior to Netflix's bid (BBG)

• Anthropic rejects Pentagon demand to drop AI safeguards, citing "final offer" as unacceptable (CNBC)

• Anthropic reports significant surge in Claude sign-ups since late 2025 (TI)

• Dell guides full year revenue above expectations, AI server revenue seen doubling to $50bn, shares surge 22% (RT)

• CoreWeave loss widens, higher-than-expected capex spikes concerns about infrastructure overspend, shares dive 18.5% (BBG)

• Alphabet and Meta ink multibillion dollar AI chip deal (TI)

• MP Materials secures major rare-earths supply deal with undisclosed automaker (BBG)

TARIFFS

• Trump administration working to preserve trade deals after Supreme Court limits tariff authority (POL)

• FedEx considers returning tariff refunds to customers after Supreme Court decision (NYT)

US-IRAN

• US and Israel launched attacks on Iran on Friday and have called for regime change (CNN)

• Heavy strikes expected to continue for days, though President Trump also said he has off-ramps (RT)

• Supreme Leader Ali Khamenei has been killed and Israel said it has also killed the commander of the Islamic Revolutionary Guard Corps and the defense minister (WP)

• Iran has launched missile attacks on US military bases in Bahrain, Qatar and the United Arab Emirates (BBC)

• Commercial ship traffic through the Strait of Hormuz has slowed sharply, though Iran is reportedly not attempting a military blockade (NYT)

GEOPOLITICS

• Trump-Xi summit preparations falter as gaps unsettle Beijing (SCMP)

• Pentagon develops AI tools to enhance cyber warfare capabilities against China (FT)

• Pakistan declares 'open war' on Afghanistan following deadly cross-border strikes (BBG)

• UK PM Starmer's Labour party suffers significant by-election defeat to Greens in traditional stronghold (CNBC)

ECONOMY

• US core PPI up 0.8% month-on-month in January, well-above 0.25% ests and highest since Mar-22, goods came in 0.3% lower month-on-month but core goods (less food and energy) spiked 0.7% and services accelerated 0.8% (BBG)

• French inflation surpasses forecasts, February CPI comes in at 1.0% year-on-year vs. 0.8% ests, reinforcing ECB's cautious rate cut stance (BBG)

• Tokyo core inflation falls below 2% for first time since Oct-2024 amid introduction of energy subsidies (RT)

ASX TODAY

• A handful of micro/small caps reported results after market close on Friday, including AEM, BCN, FDV, MHJ, RSG, SGR, TER

• EML Payments 25m share block trade crosses at 60 cents, representing 6.4% of the company (EML)

• Magellan halted pending announcement regarding a proposed merger and institutional placement (MFG)

• Wagner family sells 30m shares at $4.40 via block trade (AFR)

WHAT TO WATCH TODAY

• Energy: Oil is going to be the talk of the town today, with analyst widely expecting prices to jump 10-15% when markets open. The US-Iran situation remains fluid, and all depends on how Tehran responds to US-Israeli strikes. Seeing a lot of headlines about the potential closure at the Strait of Hormuz (which is widely seen as economic suicide for Iran and highly unlikely). Still, high-volume of ships have dropped anchors across the Middle East Gulf, war risk insurers have submitted cancellation notices for policies on ships passing through and Maersk has suspended shipments through the straight. Definitely be watching local energy names like KAR, WDS, STO, BPT etc. this morning (and probably fill up the tank!)

• Gold: Weekend gold futures also up ~3% to US$5,444. The thing about these geopolitical events is that if it escalates to a full-blow risk-off event, gold will likely tumble as well. But the current situation has yet to hit such an extreme.

BROKER MOVES

• Abacus Group upgraded to Neutral from Underweight; target remains $1.20 (JPM)

• Boss Energy upgraded to Buy from Hold; target remains $1.95 (BP)

• Block upgraded to Overweight from Equal-weight; target up to US$93 from US$72 (MS)

• Coles upgraded to Overweight from Neutral; target up to $23.50 from $21.70 (JPM)

• Dicker Data downgraded to Equal-weight from Overweight; target remains $10.30 (MS)

• SiteMinder downgraded to Neutral from Overweight; target cut to $3.60 from $7.00 (JPM)

Stocks trading ex-dividend: 

• Mon 2 Mar: Amotiv (AOV) – $0.20, Aurizon Holdings (AZJ) – $0.125, GR Engineering Services (GNG) – $0.12, L1 Long Short Fund (LSF) – $0.036, Nick Scali (NCK) – $0.39, Origin Energy (ORG) – $0.30, Pengana Global Private Credit Trust (PCX) – $0.013, Pinnacle Investment Management (PNI) – $0.29, PWR Holdings (PWH) – $0.03, Regal Partners (RPL) – $0.15, Reliance Worldwide (RWC) – $0.028, Steadfast Group (SDF) – $0.082, Wotso (WOT) – $0.014

• Tue 3 Mar: Accent Group (AX1) – $0.033, Ashley Services Group (ASH) – $0.014, Bell Financial Group (BFG) – $0.065, Cuscal (CCL) – $0.045, Dicker Data (DDR) – $0.115, Domino's Pizza Enterprises (DMP) – $0.25, Downer EDI (DOW) – $0.129, EDU Holdings (EDU) – $0.03, Embark Early Education (EVO) – $0.015, Evolution Mining (EVN) – $0.20, HMC Capital (HMC) – $0.06, Ironbark Balanced Income (IBC) – $0.013, Jumbo Interactive (JIN) – $0.12, Propel Funeral Partners (PFP) – $0.075, Qualitas (QAL) – $0.035, QUBE Holdings (QUB) – $0.053, REA Group (REA) – $1.24, REDOX (RDX) – $0.065, SGM (SGM) – $0.14

• Wed 4 Mar: Capral (CAA) – $0.30, EVT (EVT) – $0.18, IDP Education (IEL) – $0.03, Integral Diagnostics (IDX) – $0.033, Mercury NZ (MCY) – $0.085, Monash IVF Group (MVF) – $0.012, Mayfield Group Holdings (MYG) – $0.02, Netwealth Group (NWL) – $0.21, Pacific Current Group (PAC) – $0.20, SGH (SGH) – $0.32, Shaver Shop Group (SSG) – $0.048, Sigma Healthcare (SIG) – $0.02, Sonic Healthcare (SHL) – $0.45, Northern Star Resources (NST) – $0.25, Servcorp (SRV) – $0.16, Solvar (SVR) – $0.085, TPC Consolidated (TPC) – $0.20, Woolworths Group (WOW) – $0.45, Worley (WOR) – $0.25

• Thu 5 Mar: AEF Australian Ethical Investment (AEF) – $0.08, Ampol (ALD) – $0.60, BHP Group (BHP) – $1.03, Beacon Lighting Group (BLX) – $0.041, EBOS Group (EBO) – $0.427, EQT Holdings (EQT) – $0.56, Freightways Group (FRW) – $0.179, Heartland Group Holdings (HGH) – $0.029, Iluka Resources (ILU) – $0.03, Karoon Energy (KAR) – $0.031, L1 Global Long Short Fund (GLS) – $0.01, L1 Group (L1G) – $0.01, Laserbond (LBL) – $0.008, Lovisa Holdings (LOV) – $0.53, Meridian Energy (MEZ) – $0.053, Monadelphous Group (MND) – $0.49, Nib Holdings (NHF) – $0.13, Northern Star Resources (NST) – $0.25, NZME (NZM) – $0.051, Perseus Mining (PRU) – $0.05, Praemium (PPS) – $0.013, QBE Insurance Group (QBE) – $0.78, RIO Tinto (RIO) – $3.602, Schaffer Corporation (SFC) – $0.45, Smartgroup Corporation (SIQ) – $0.335, SKS Technologies Group (SKS) – $0.035, South32 (S32) – $0.055, Symal Group (SYL) – $0.033, Tribeca Global Natural Resources (TGF) – $0.05, Woodside Energy Group (WDS) – $0.834

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: Image Resources (IMA), TasFoods (TFL)

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

• 11:30 am: Australia Company Gross Profits

• 8:00 pm: Italy GDP 

• 2:00 am: US ISM Manufacturing PMI