Key Takeaways

• S&P/ASX 200 futures pointed about 50 points (0.6 per cent) lower to roughly 8,750 ahead of Friday's open, after the index closed at 8,839.0 on Thursday 23 July 2026.

• Brent crude jumped 6.9 per cent to US$100.52 a barrel, its first close above US$100 in about two months, on renewed US-Iran conflict fears.

• A global tech rout saw Tesla fall 14.5 per cent and Alphabet drop 6.9 per cent after earnings renewed doubts about the hundreds of billions being spent on AI.

• Bonds, gold and crypto fell alongside shares, breaking the usual "safe haven" pattern; energy was the standout gainer.

• Strong June jobs data has kept a possible RBA rate rise on the table, sharpening the market's sensitivity to inflation.

Australian shares are poised to open lower on Friday, tracking a heavy fall on Wall Street after renewed Middle East tensions pushed oil back above US$100 a barrel and a global technology sell-off punished the biggest names in artificial intelligence. Rising bond yields and fresh inflation fears added to a rare day when almost everything fell at once.

Australian shares were set to open lower on Friday 24 July 2026, following one of the more unsettling sessions global markets have had this year. S&P/ASX 200 futures pointed about 50 points, or 0.6 per cent, lower to roughly 8,750 in early trade ahead of the local open, after the benchmark closed at 8,839.0 on Thursday 23 July, up 16 points or 0.18 per cent. (All figures in this article are historical unless stated; US and European markets referenced were closed for the session, while ASX futures trade around the clock.)

The overnight lead was poor. On Wall Street, the Dow Jones Industrial Average fell about 1 per cent, the S&P 500 lost 1.2 per cent and the tech-heavy Nasdaq Composite dropped 2.2 per cent at Thursday's close in New York. European shares had their steepest one-day fall in more than two weeks, with the pan-European STOXX 600 down 1.3 per cent to 638.5 points, according to Reuters.

A triple shock hits at once

What made Thursday unusual was not any single move but the combination. Tony Trzcinka, a portfolio manager at Impax Asset Management, described investors being hit with "a triple whammy of AI capex anxiety, oil shock and a rate repricing" — three separate pressures landing in the same session.

Each of those forces would ordinarily be significant on its own. Together they produced a rare kind of day. As economist Mohamed El-Erian observed, it was "one of those market days where the vast majority of asset classes are down, including stocks, bonds, crypto and gold," with energy the notable exception.

That pattern matters because the three assets investors typically retreat to when shares wobble — government bonds, gold and, for some, cryptocurrency — all fell at the same time. When those cushions give way together, there are fewer places to hide, and the moves in shares can feel sharper than the headline percentages suggest.

Oil back above US$100 revives the inflation problem

The clearest trigger was energy. Brent crude, the global benchmark, jumped 6.9 per cent to US$100.52 a barrel — its first move above US$100 in about two months — on renewed fears of conflict involving the United States and Iran. (Brent is the price of a barrel of North Sea crude and sets the tone for fuel costs worldwide.)

Higher oil feeds almost immediately into petrol bowsers, freight, airfares and the cost of making and moving goods. That is why a sudden spike revives inflation worries: it lifts prices across the economy at a time when central banks are still trying to bring inflation back to target.

The market's response was visible in bonds. Yields, which move opposite to bond prices, climbed as investors priced in the risk that higher energy costs keep inflation — and interest rates — elevated for longer. The US 10-year Treasury yield sat near 4.69 to 4.70 per cent, German yields reached a 15-year high, and the Australian 10-year yield was around 4.99 per cent. Rising yields tend to weigh on shares because they raise the return available from safer assets and increase the discount applied to companies' future profits.

The AI capex bill spooks Wall Street

The second force was closer to the heart of the bull market: spending on artificial intelligence. Two of the largest US companies reported earnings, and in both cases investors focused less on the profits and more on the mounting cost of building AI.

Tesla shares fell 14.5 per cent and Alphabet, the parent of Google, dropped 6.9 per cent. Apple was the best-performing mega-cap, down a comparatively modest 1.3 per cent. The concern was not that results were weak but that the sheer scale of planned investment — the hundreds of billions of dollars flowing into data centres, chips and computing power — is running ahead of any clear evidence of the returns it will generate.

That anxiety spread beyond equities. Bonds issued by big technology names also sold off, with yields rising on debt such as Alphabet's 2046 bonds and Oracle's 2030 bonds — a sign the wariness extended to how these companies are funding their build-out, not just their share prices.

The debate here is genuinely two-sided. Supporters of the heavy spending argue it is the price of leadership in a technology that could reshape whole industries, and that pulling back now would be short-sighted. Sceptics counter that the outlays are enormous relative to any revenue AI is yet generating, and that the market has been paying for a promise rather than a result. Thursday's reaction suggests that, for now, patience is thinner than it was — a shift in mood that Australian investors with global exposure cannot ignore, given how heavily the big US technology names feature in international index funds.

When safe havens stop being safe

For Australian investors, the more instructive detail may be what happened to the traditional shock absorbers. Gold, often bought when markets turn nervous, fell about 2 per cent to US$4,049.58 an ounce. The Cboe Volatility Index, or VIX — Wall Street's so-called "fear gauge", which rises when investors expect turbulence — climbed 2.06 points to 18.70, an elevated but far from panicked level.

The simultaneous decline in shares, bonds and gold points to a repricing of interest-rate expectations rather than a simple flight from risk. When the story is "rates may stay higher", cash and money-market returns become the competition, and even defensive assets can lose ground together.

What it means for the ASX

The read-through to the local market is mixed, and the composition of the ASX helps explain why.

On the positive side of the ledger, higher oil prices tend to support Australian energy producers, whose revenues are tied to the crude price. Iron ore, meanwhile, edged up 1.1 per cent to US$98.10 a tonne, a modest tailwind for the large mining companies that anchor the index. The Australian dollar was around US$0.6968, down 0.31 per cent, a level that can flatter the earnings of exporters and companies with US revenue when translated back into local currency.

Working the other way, the market's technology and other rate-sensitive corners face the same pressures that hit Wall Street. Locally listed tech names, high-growth stocks and businesses whose valuations lean on profits far in the future are the most exposed to rising bond yields and a global reassessment of the AI trade. Interest-rate-sensitive sectors such as real estate investment trusts can also struggle when yields climb.

The net effect, on the futures signal, was a market leaning lower — with energy and resources potentially cushioning some of the fall while tech and rate-sensitive names bear the brunt.

It is worth stressing that a futures signal is an expectation, not an outcome. Futures indicate where traders think the market will open based on overnight information; the actual session can diverge once local buyers and sellers weigh in, particularly if the oil price or bond yields move again before the ASX opens. A 0.6 per cent indicated fall is also a modest move by historical standards, and follows a Thursday close that was still only a short distance from record territory. Context matters: the local market went into Friday in reasonable health, which is part of why the fall was described as tracking overseas losses rather than reflecting a home-grown problem.

Opportunities and risks

None of this points in a single direction, and the picture could shift quickly.

The possible opportunities lie in the divergence: a higher oil price changes the earnings backdrop for energy producers, and a softer Australian dollar can help exporters. For investors focused on income, higher bond yields mean fixed-income assets are offering more than they have for much of the past decade.

The risks are just as clear. Oil spikes driven by geopolitics can reverse as fast as they appear, so the energy tailwind is not dependable. A sustained rise in yields pressures the borrowing costs of households and companies and can cap valuations across the board. And if the doubts about AI spending harden into a broader loss of confidence in the largest US stocks, the flow-through to global sentiment — including Australia's — could persist well beyond a single session. This is general information, not a recommendation to act on any of these themes.

What Investors May Watch Next

Several signposts will help clarify whether Thursday was a one-off jolt or the start of something more durable.

The Reserve Bank of Australia is central. Strong June employment data — with unemployment holding at 4.4 per cent and hiring surprising to the upside — has kept the possibility of a rate rise on the table and sharpened the market's reaction to anything inflationary. Any shift in the RBA's tone, or in the inflation figures it watches, will move local rate expectations.

US corporate earnings are the next test of the AI narrative. With sentiment fragile, further results from large technology companies will show whether investors are willing to keep funding heavy AI investment or want to see returns first.

Oil and the Middle East remain the swing factor for inflation. Whether Brent holds above US$100 or retreats will shape bond yields and central-bank thinking in the weeks ahead.

Finally, the bond market itself is worth watching. If yields keep climbing, the pressure on shares — particularly growth and rate-sensitive names — is likely to continue. If they stabilise, some of Thursday's anxiety may fade as quickly as it arrived.