Morning Wrap: ASX 200 to tumble, Commodity prices dip, S&P 500 lower but off worst levels,

ASX 200 futures are down 116 pts (-1.30%) as of 8:30 am AEDT.

In a nutshell:

• Major US benchmarks lower but well-off worst levels (e.g. S&P 500 closed 0.94% lower vs. session low of 2.49%)

• Equities, bonds and commodities all moved in tandem (for once)

• Commodity prices smashed, with gold down ~4% but still above US$5,000/oz, while silver, platinum and palladium down 7-8%

• Major escalation in the Middle East, Trump still planning further 'big wave of attacks', while energy infrastructure/energy prices remain a key macro focus

Let's dive in.

Overnight Summary

Wed 04 Mar 26, 8:24am (AEST)

Name	Value	% Chg
Major Indices
S&P 500	6,817	-0.94%
Dow Jones	48,501	-0.83%
NASDAQ Comp	22,517	-1.02%
Russell 2000	2,609	-1.78%
Country Indices
Canada	33,785	-2.19%
China	4,123	-1.43%
Germany	23,791	-3.44%
Hong Kong	25,768	-1.12%
India	80,239	-1.29%
Japan	56,279	-3.06%
United Kingdom	10,484	-2.75%

Name	Value	% Chg
Commodities (USD)
Gold	5,100.23	-4.18%
Copper	5.79	-1.81%
WTI Oil	74.58	+4.70%
Currency
AUD/USD	0.7043	-0.73%
Cryptocurrency
Bitcoin (USD)	68,017	-1.55%
Ethereum (AUD)	2,793	-3.19%
Miscellaneous
US 10 Yr T-bond	4.056	+0.20%
VIX	23.61	+10.11%

S&P 500 SESSION CHART

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

OVERNIGHT MARKETS

• Major US benchmarks sharply lower but off worst levels

• S&P 500 (-0.94%) well-off session lows of -2.49%

• Markets sharply lower in the first hour of trade, but trended higher for most of the session

• VIX spiked to a peak of 28 but settled at 23.5, yields also faded sharp gains in early trade, with the 2-year soaring to 3.60% but now back to 3.50%

• Big Tech and software stocks held up surprisingly well, iShares Expanded Tech Software ETF finished 1.6% higher, handful of Mag-7 names slightly positive (Microsoft, Amazon and Meta)

• Major escalation in the Middle East – Iran hit a US embassy in Saudi Arabia, six US servicemembers killed in a drone strike in Kuwait, ongoing concerns of Iran retaliation on Middle East energy infrastructure, Trump says big wave of attacks still to come

• Stocks, risk assets sell off in tandem as correlations jump to highest since November (SW)

• US market dispersion hitting levels not seen in decades with AI disruption and disintermediation risks one of the notable drivers (WSJ)

ENERGY

• European gas prices surge as Commission delays action amid Iran conflict supply threats (FT)

• Rubio says US will unveil plan on Wednesday to combat oil price increases (RT)

• Strait of Hormuz closure threatens global energy with Asia most impacted, Qatar and UAE account for 99% of Pakistan's LNG imports, 60% of India's oil imports come from the Middle East (CNBC)

• Oil tanker rates hit record highs as Iran conflict disrupts Strait of Hormuz (RT)

• China pressures Iran to avoid disrupting energy shipments through Strait of Hormuz (BBG)

• Iraq has cut oil production by nearly 1.5mbpd, could widen cuts to more than 3mbpd within days (RT)

STOCKS

• Amazon says drones have now hit three of its Middle East data centers amid Iran conflict (CBS)

• Blue Owl shares fall below 2021 listing price amid latest fears around investor redemptions and software exposure (FT)

• Anthropic's Claude AI models had 'elevated errors' on Tuesday as app held top spot on Apple's App Store (CNBC)

• OpenAI's Altman admits rushed Pentagon deal amid backlash (CNBC)

• Qualcomm CEO sees robotics as larger opportunity within two years (CNBC)

• Meta tests AI chatbot shopping feature with personalised product recommendations (BBG)

• Airlines face unprecedented disruptions from Middle East conflict exceeding past crises (GD)

• Applied Digital seeks $2.15bn junk bond for AI data centre expansion (BBG)

IRAN

• US prepares for major escalation in Iran strikes targeting missiles and drones (CNN)

• Iranian strikes on Gulf states are boosting likelihood of Saudi Arabia and UAE entering the war (AX)

• US shuts embassies in Saudi Arabia and Kuwait after second drone attack (NBC)

• US military has carried out over 1,700 strikes against Iran since operations started on Saturday (TI)

CENTRAL BANKS

• Fed's Kashkari hints at monetary policy implications of Iran conflict, says too soon to tell (BBG)

• Fed's Williams says rate cuts still possible this year, tariff burden falls 'overwhelmingly' on US (CNBC)

• Fed's Schmid reiterates that inflation remains too high (BBG)

• ECB's Kazaks says February inflation print "will keep us in a cautious mood" (RT)

• ECB's Lane warns prolonged Middle East war could spike Eurozone inflation and lower growth (RT)

• RBA's Bullock signals possible March rate hike amid inflation risks, RBA will not wait for first quarter inflation data to make a decision (RT)

TARIFFS & TRADE

• Trump threatens to cut off US trade with Spain after being denied use of air base (BBG)

ECONOMY

• Global economists predict inflation surge from Iran war driven by energy costs (BBG)

• Eurozone inflation accelerates unexpectedly in February (BBG)

• Japan unemployment rises to 2.7% for first time in five months (XH)

• China parliament likely to set 4.5-5% growth target amid rebalancing efforts (RT)

ASX TODAY

• BHP sees minimal short-term impact from US-Iran conflict due to Asia-focused output (BBG)

• Endeavour Group reports 1H26 underlying NPAT of $278m vs. $275.9m ests, interim dividend of 10.8 cps, sales growth for the first seven weeks of 2H26 was 1.3% for retail and 4.5% for hotels (EDV)

• GenusPlus acquires Railtrain Holdings for $36.5m (GNP)

• Wagners Family divests 29.8m shares, lowering stake from 44.4% to $29.5% (WGN)

WHAT TO WATCH TODAY

• Leverage unwind: Resources got absolutely obliterated overnight, with most resource-related ETFs down 4-8%, with gold, uranium, copper and nickel leading the carnage. When you think about it, what sectors have held up over the past few weeks? Software has been smashed (with historic short), and most AI-related names (ex-semis) are lower year-to-date. Commodities, by contrast, had largely avoided any meaning drawdown, so when a risk-off catalyst hits, the leverage unwind gets violent. The other sector that comes to mind are South Korean semi plays, with SK Hynix shedding 11.5% yesterday.

• Energy: Given the escalation, you'd think oil prices are headed directionally higher, but on a very, very volatile path. Brent is currently up 4.6% (US$81.7 a barrel), but off session highs of 9.0%. On Monday, prices finished 6.6% higher, down from session highs of 12.5%.

BROKER MOVES

Broker data has yet to cross our desk this morning. Please check the Evening Wrap for a complete list of today's broker data.

Stocks trading ex-dividend: 

• 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: Endeavour Group (EDV)

• IPOs: None

• AGMs: None

Economic calendar (AEDT):

• 9:00 am: Australia Ai Group Industry Index

• 11:30 am: Australia GDP

• 12:30 pm: China NBS Manufacturing PMI

• 2:00 am: US ISM Services PMI