Staff writers Updated August 3, 2026 — 10:10am,first published August 3, 2026 — 5:23am Save You have reached your maximum number of saved items. Remove items from your saved list to add more. AAA The Australian sharemarket has slid lower at the open with forecasted heavier losses averted after US President Donald Trump said he’s
Staff writers
Updated ,first published
The Australian sharemarket has slid lower at the open with forecasted heavier losses averted after US President Donald Trump said he’s holding off on delivering new strikes on Iran.
The S&P/ASX 200 was down 29.8 points, or 0.3 per cent, in early trade. Futures had predicted a loss of more than 1 per cent but they were set on Saturday, before Trump backed down after Tehran and other Middle Eastern powers told him they’re working on an agreement that might quickly reopen the Strait of Hormuz.
The news sent oil p;rices falling, with Brent, the international standard, shedding 4.6 per cent and WTI oil for September falling 4.7 per cent in early Asian trade.
The Australian dollar was trading at US70.42¢ at 10.07am AEST.
On Wall Street on Friday, the S&P 500 climbed 0.7 per cent after veering between gains and losses through the day. The Dow Jones added 276 points, or 0.5 per cent, and the Nasdaq composite rallied 1 per cent after briefly losing all of an early 1.3 per cent jump.
It’s a fitting finish to July for the US stock market, which lurched up and down as oil prices shot higher because of the war with Iran and worries grew about whether Big Tech’s massive investments in artificial-intelligence technology will translate into profits and whether chipmaker stocks soared too high in the euphoria around AI.
Friday’s gains sent the S&P 500 to its first winning week in three, but the main measure of the US stock market nevertheless finished the month with a tiny loss.
Amazon led the market with a leap of 15.3 per cent after reporting much stronger profit for the latest quarter than analysts expected. Its profit more than tripled from a year earlier, thanks in part to an acceleration of growth in its cloud computing business.
Analysts said that could be a signal Amazon’s huge AI investments are paying off, and Amazon increased its forecast for how much it will spend on investments this year.
The reaction was similar to what Microsoft got a day before, when its stock soared to its best day in nearly 18 years on signals that its AI investments may also be yielding higher profits.
Chip companies selling the processors and computer memory that such “hyperscalers” are scrambling to buy swung sharply again on Friday. Micron Technology, for example, went from an early jump of 6.4 per cent to a loss of 6.5 per cent before finishing with a fall of 5.9 per cent.
More firmly on the losing end of Wall Street was Apple, which dropped 7.4 per cent despite reporting stronger profit for the latest quarter than expected. Its forecast for revenue growth in the current quarter fell short of expectations, which executives pinned on a supply crunch in components getting vacuumed up in the AI boom.
All told, the S&P 500 rose 52.09 points to 7,489.72. The Dow Jones added 276.97 to 52,485.03, and the Nasdaq composite climbed 251.68 to 25,373.85.
Higher oil prices have pushed the cost for a gallon of regular gasoline to an average of nearly $US4.11 across the United States, up from $US3.85 a month ago, according to AAA. More expensive oil also puts upward pressure on prices for virtually every product that rides on a ship, plane or truck before getting to a customer.
The worries about inflation sent yields in the bond market even higher.
The yield on the 10-year Treasury rose to 4.71 per cent from 4.68 per cent late Thursday and from just 3.97 per cent before the war with Iran sent oil prices shooting higher. That’s a notable move for the yield, which moves higher when investors’ expectations for inflation, economic growth and other factors in upcoming years are rising.
The leap for the 10-year yield has already sent the average long-term US mortgage rate to its highest level in a year.
Longer-term yields jumped on Wednesday after the Federal Reserve’s chairman, Kevin Warsh, promised again to get inflation back down to 2 per cent but refused to say how he plans to get it there. The Fed voted again to keep its main interest rate steady on Wednesday, even though inflation remains well above 2 per cent.
Hikes to rates by the Fed could restrain inflation, but they could also slow the economy and undercut prices for stocks and other investments. President Donald Trump, who nominated Warsh to lead the Fed, has lobbied for lower interest rates instead of higher.
Warsh has told financial markets that he does not want to give hints about what the Fed will do with interest rates, saying he wants to get direct, “unfiltered” messages from them rather than echoes back of what the Fed has suggested.
But “without clarifying why action was or wasn’t taken already, it’s hard to see how statements about being committed to hitting its inflation target aren’t just a bluff,” according to Brian Jacobsen, chief economic strategist at Annex Wealth Management.
“The Fed is facing a growing credibility problem,” economists at Bank of America wrote in a report. Unless data comes in showing less pressure on inflation in the interim, “it is imperative for the Fed to pass the September test by hiking rates and delivering an internally consistent narrative.”
In stock markets abroad, the swings were even wilder for chip stocks.
Seoul’s Kospi index soared 17.9 per cent for its best day in history. The index is dominated by two tech giants, Samsung Electronics and SK Hynix, and both surged at least 26.8 per cent on Friday.
The Kospi, though, still lost 22 per cent in July despite Friday’s historic move. That’s after it more than doubled in the first six months of the year.
AP
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