Staff writers
Updated ,first published
The Australian stock market opened higher but erased its gains in the first half hour of trading as investors awaited progress on the next round of peace talks between the United States and Iran after the latest escalation of tensions in the Middle East, which sent Wall Street lower overnight.
The S&P/ASX 200 was down 20.2 points, or 0.2 per cent, at 8933.10 by 10.41am AEST. The local bourse had it inches by 0.1 percent higherr on Monday, with investors cautiously optimistic ahead of the end of the ceasefire early Thursday AEST. The Australian dollar fell 0.1 percent to US71.70¢.
Energy stocks were the biggest heavyweights in early trade as oil prices fell on signs that Iran will attend talks with the United States in Islamabad before the end of the ceasefire. West Texas Intermediate for June fell as much as 2.2 percent to around $US86 a barrel this morning. Brent had closed 5.6 percent higher on Monday at more than $US95 before trading in Asia. Oil and gas majors Woodside and Santos were down 1 percent and 1.2 percent respectively.
Iran is sending a team to the Pakistani capital, according to people familiar with the plans who declined to be identified. Previously, Tehran had said it was reluctant to engage in further peace talks with the United States. Vice President JD Vance is traveling to Pakistan to resume talks, “either Tuesday night or Wednesday morning,” Donald Trump said in a phone interview Monday.
The US president said it was “highly unlikely” that he would extend the ceasefire, which expires “Wednesday evening Washington time.”
Gold producers weighed on the equipment sector as gold prices rose. Bullion was around $US4830 an ounce in early trade, having lost 0.2 percent in the previous session. Northern Star Resources fell 1.7 percent and Evolution Mining lost 2 percent.
Iron ore major Rio Tinto, meanwhile, added 0.2 percent. The mining giant said its first-quarter global iron ore production, including the first shipment from its new Simandou mine in Africa, rose 12 percent, and its copper output was up 9 percent year-on-year. Chief executive Simon Trott said the size and quality of Rio’s mines “ensured growth and supply resilience against changing operating conditions as we continue to closely monitor developments in the Middle East.” Shares in major rival BHP also rose 0.2 percent.
Shares in Woolworths rose 0.4 percent ahead of this morning the resumption of the historic case of the Australian consumer watchdogwhich has accused the big businessman of selling vegetables through discounts that were not real. Its lawyers will dismiss in the Federal Court in Sydney allegations by the Australian Competition and Consumer Commission that it sold staple foods in its “Prices Dropped” program at the same or even higher prices.
The case follows his rival Coles defending the same accusations for two weeks heard by the Federal Court in Februarya final judgment that has been reserved until the Woolies case is over. Shares in Coles fell 0.3 per cent.
Tech shares were among the early gainers for local bosses, with software developers WiseTech Global and Xero rising 2.1 percent and 1.2 percent, respectively. The financial sector, which accounts for more than a third of the market, was flat.
On Wall Street overnight, US stocks retook some of their recent record-breaking rally. The S&P 500 slipped 0.2 percent from its all-time peak, its second drop in 14 days after the United States seized an Iranian-flagged cargo ship that it said tried to evade a blockade of Iranian ports. The Dow Jones Industrial Average fell less than 0.1 percent, and the Nasdaq composite fell 0.3 percent.
Concerns that Iran could keep oil in the Persian Gulf if it continues to block tankers from leaving the Strait of Hormuz led to a reversal from the previous day’s trading on Wall Street, when stocks rose and oil prices fell after Iran said on Friday it was reopening the commercial trade route. That enthusiasm quickly faded after Iran closed the strait again on Saturday as the US moved ahead with a blockade of Iranian ports.
Monday’s relatively muted moves show investors still see the possibility of a U.S.-Iran deal that could get oil from the Middle East to customers around the world. It would be in the economic interests of both countries to end the war.
Companies with large oil bills fell to Wall Street’s biggest losses following the rise in the cost of crude oil, as they experienced many wars. Norwegian Cruise Line Holdings fell 3.5 percent, and Royal Caribbean Group lost 1.1 percent.
United Airlines sank 2.8 percent, and American Airlines fell 4.2 percent after American said it had no interest in merging with United. The airline’s shares rose further last week following reports that United wanted to merge with its rival.
On the winning side of Wall Street was TopBuild, a supplier of insulation and building products, which jumped 19.4 percent. QXO is buying it in a deal worth about $17 billion.
One big reason the US stock market has been strong recently is the strong profits that US companies have been reporting for the first three months of 2026, along with expectations for continued growth.
While reporting higher profits for the latest quarter than analysts had expected, several of the largest US banks said last week that they see the US economy continuing to be strong, largely due to robust US consumer spending.
“Despite geopolitical risks, the recovery is not yet complete,” according to Morgan Stanley strategists led by Michael Wilson. It has remained so strong that analysts have raised their profit expectations since the battle began in the spring of 2026.
with AP, Bloomberg
The Market Recap is a summary of the day’s trading. Let’s find each otherekday afternoon.
