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The ASX is expected to open down today with Brent crude prices up 3.72% to US$112.870 per barrel after a drone strike killed two people in Saudi Arabia.
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ASX 200 futures are down 19 points (-0.21%), also pointing to a softer start as a sharp sell-off in US technology stocks and falling commodity prices weigh on sentiment.
The Nasdaq fell 2.60% overnight, the S&P 500 lost 1.21%, while the Dow Jones finished virtually flat. The sell-off was led by semiconductor stocks, with the Philadelphia Semiconductor Index plunging 6.7% as investors reassessed the cost of the AI boom.
Meta fell 7% despite beating earnings expectations as increased AI spending revived concerns about how technology companies will fund their infrastructure ambitions.
The pressure extended across Asian markets, with Japan’s Nikkei down 2.7% and Hong Kong’s Hang Seng falling 3.1%.
For Australian investors, the combination of technology weakness, sharply lower metals prices and rising oil adds to an already complicated market outlook.
What to watch today
Is the AI boom turning into a bubble? Investors are increasingly questioning whether the returns from artificial intelligence will justify the enormous spending on chips, data centres and infrastructure.
Meta’s latest results highlighted the tension: revenue growth remains strong, but the cost of building out AI capabilities continues to rise. The semiconductor sell-off suggests investors are becoming more selective about which companies can turn that investment into sustainable profits.
Oil and the Middle East: Brent crude traded above US$112 a barrel after a drone strike near Saudi Arabia’s Shaybah oil field killed two people, while Iran reported further attacks on vessels in the Strait of Hormuz.
The reports add to concerns about disruption to global energy supplies. Higher oil prices could put renewed pressure on inflation and business costs.
Inflation and interest rates: Australia’s S&P Manufacturing and Services Purchasing Managers’ Index (PMI) is due at 9:00 am AEDT.
Investors are also looking ahead to next week’s quarterly inflation figures, which could influence expectations for the Reserve Bank of Australia’s next interest-rate decision.
The market signals
The numbers behind the noise — two indicators that help explain the mood across global markets.
Bond yields influence borrowing costs and how investors value future company earnings. Rising yields can put pressure on growth stocks, while falling yields may ease that pressure — depending on what is driving the move.
The VIX measures expected volatility in the US S&P 500 over roughly the next 30 days. A rising reading suggests investors expect larger market swings and may be becoming more cautious. It measures expected volatility, not whether shares will rise or fall.
US technology stocks sold off sharply overnight as volatility climbed. Bond yields provide another piece of the puzzle, but investors need to consider why yields are moving rather than treating either indicator as a standalone signal for where shares go next.
US market indicators. Figures shown are from the 23 October 2026 market update.
On the calendar
The Australian PMI is due at 9:00 am AEDT, offering a fresh read on activity across the manufacturing and services sectors.
Aussie Broadband (ASX: ABB), McMillan Shakespeare (ASX: MMS) and Reliance Worldwide Corporation (ASX: RWC) are listed as holding AGMs today.
Investors should also watch for company-specific announcements and quarterly updates as the reporting season continues.
The take-away
The latest sell-off raises a broader question about what happens when investors begin demanding stronger evidence of returns from the AI boom. Technology shares are under pressure, metals have fallen sharply – and oil prices are climbing on geopolitical risks.
For the ASX, that creates competing forces. Energy stocks may benefit from higher crude prices, while miners face pressure from weaker metals and concerns about global growth.
Defensive sectors could attract further attention if investors continue moving away from more volatile parts of the market.
Local market news
Celsius Resources (ASX: CLA) has reported strong progress with its Opuwo cobalt-copper project sale;
Vita Resources (ASX: VTA) has announced it will undertake an SPP to raise funds to support the Ninnis gold project;
Alma Metals (ASX: ALM) has obtained promising drilling results at the Briggs copper project;
West Cobar Metals (ASX: WC1) has kicked off scandium drilling at Salazar; and
Rio Tinto (ASX: RIO) has confirmed an investment of $1.9B to develop the Kangwinan bauxite project.
Buck & ore
Now – in forex, the Oz dollar is buying US$0.7016
Looking at commodities, all in the greenback,
Iron Ore was down 0.13% to $90.73 in Singapore today,
Brent Crude was up 3.72% to $112.870 per barrel,
Gold was selling at $4024.21
US natgas futures were down 0.51% to $2.7758 per gigajoule.
That’s HotCopper’s Market Open, I’m Colin Sandell-Hay – happy trading.
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