Markets Overview

  • ASX SPI 200 futures down 0.6% to 8,993.00
  • S&P 500 down 0.6% to 6,842.24
  • Dow Average down 0.8% to 49,269.70
  • Aussie little changed at 0.7047 per US$
  • US 10-year yield little changed at 4.0750%
  • Australia 3-year bond yield rose 7.8 bps to 4.33%
  • Australia 10-year bond yield rose 6 bps to 4.78%
  • Gold spot up 0.2% to $4,986.99
  • Brent futures up 2.1% to $71.81/bbl

Economic Events

  • 09:00: (AU) Feb. S&P Global Australia PMI Compo, prior 55.7
  • 09:00: (AU) Feb. S&P Global Australia PMI Mfg, prior 52.3
  • 09:00: (AU) Feb. S&P Global Australia PMI Servi, prior 56.3
  • 11:00: (AU) Australia to Sell A$800 Million 3.25% 2029 Bonds on Feb. 20

Heightened geopolitical worries sent stocks lower while extending a surge in oil and keeping a lid on bonds amid perceived inflation risks. Gold hovered near $5,000, while selling shook alternative asset managers after a private credit fund halted redemptions.

As a sense of caution prevailed, the S&P 500 retreated after a rebound from a tech-fueled selloff. A closely watched gauge of chipmakers slid 1.1%. Walmart Inc.’s comparable sales in the US beat expectations, but the world’s largest retailer gave a conservative outlook. Crude hit the highest since August. Treasuries wavered. The dollar rose.

President Donald Trump said the US has to “make a meaningful deal” with Iran while adding that the next 10 days will tell whether there will be an accord. Iran is a “hot spot” right now even as officials from both sides engage in “good talks,” Trump said. He also noted his son-in-law Jared Kushner will be an “envoy of peace.”

The US military is stationing a vast array of forces in the Middle East, including two aircraft carriers, fighter jets and refueling tankers, giving Trump the option for a major attack against Iran as he pressures the country to strike a deal over its nuclear program.

American military buildup in the region means Iran’s window to reach a diplomatic agreement over its atomic activities is at risk of closing, according to the head of the United Nations nuclear watchdog. A potential war would put flows at risk from a region that pumps about a third of the world’s oil.

The rising risk of an attack in the Middle East is impairing risk appetite near-term, according to Thomas Lee at Fundstrat Global Advisors.

Also dimming sentiment among investors was Blue Owl Capital Inc.’s decision to restrict withdrawals from one of its private credit funds that raised concern over the risks bubbling under the surface of the $1.8 trillion market. Its shares sank 8%, dragging down industry peers like Apollo Global Management Inc., Ares Management Corp. and TPG Inc.

Some traders also attributed the risk-off mood to caution ahead of Friday’s readings on the economy and inflation, particularly after minutes of the Federal Reserve’s latest meeting meeting showed renewed concerns about price pressures.

About 350 firms in the S&P 500 slid as the index fell to around 6,840. The yield on 10-year Treasuries dropped one basis point to 4.07%. A $9 billion sale of 30-year Treasury Inflation-Protected Securities was strong. West Texas Intermediate topped $66.