ASX wobbles as oil stocks and gold miners fall, Wall Street slips

The Australian sharemarket swung between small gains and losses on Tuesday to close almost unchanged, as investors await progress on a further round of peace talks between the US and Iran after the latest rise of tensions in the Middle East, which sent Wall Street lower overnight.

The S&P/ASX 200 finished down 3.9 points at 8949.40, with five of its 11 industry sector in the green. The local bourse had inched up 0.1 per cent on Monday, treading water amid cautious hopes for a negotiated settlement of the war before the end of a ceasefire on early Thursday AEST. The Australian dollar slipped 0.2 per cent to US71.63¢ as of 4.22pm AEST.

Energy stocks were the biggest weight on the market as oil prices eased on signs that Iran would attend negotiations with the US in Islamabad before the ceasefire ends. West Texas Intermediate for June fell 1.4 per cent to around $US88 a barrel, while Brent dropped 0.9 per cent to $US94.58 by the time the ASX finished trading. Local oil and gas giants Woodside and Santos were down 1.8 per cent and 1.5 per cent, respectively, and refiner Ampol dropped 0.9 per cent.

However, coal producers jumped as alternative providers of fossil fuel, with Yancoal and Whitehaven Coal each gaining 3.8 per cent.

US President Donald Trump signalled he was unlikely to extend a two-week ceasefire with Iran set to expire in two days, while Iran had yet to confirm it would participate in talks to end a war that has engulfed the Middle East and upended global trade.

Trump said in an interview on Monday the ceasefire expired on Wednesday evening in Washington, and he was “not going to be rushed into making a bad deal”. He said the Strait of Hormuz would stay blockaded for now, and “I’m not opening it until a deal is signed.” Iran’s parliament Speaker, Mohammad Bagher Ghalibaf, said his country would not “accept negotiations under the shadow of threats”.

The standoff underscores the uncertainty surrounding a new round of talks, even after Trump said negotiations could begin as early as Tuesday his time. The US president threatened strikes on Iran’s power infrastructure if diplomacy failed. A pause in hostilities has mostly held for two weeks after a conflict that killed thousands across the region and disrupted global energy supplies.

Vice President JD Vance will leave for Pakistan to participate in negotiations due to begin “either Tuesday night or Wednesday morning”, Trump said. Vance was expected to be joined by the president’s son-in-law, Jared Kushner, and special envoy Steve Witkoff.

“There’s going to be a meeting. They want a meeting, and they should want a meeting. And it can work out well,” Trump said.

With the global uncertainty continuing, shares in airlines Qantas and Virgin Australia fell 1.3 per cent and 1.2 per cent, respectively, even as they launched domestic ticket sales to shore up their cash coffers during the Middle East conflict, which has thrown international travel into turmoil. Travel agent Flight Centre shed 2.2 per cent.

Gold producers weighed on the materials sector as gold prices declined, with traders weighing prospects for a peace deal to end the war that has heightened inflation risks. Bullion fell as much as 0.6 per cent to trade below $US4800 an ounce, having lost 0.2 per cent in the previous session. Northern Star Resources fell 0.8 per cent and Evolution Mining lost 1.6 per cent.

Iron ore major Rio Tinto, meanwhile, added 0.8 per cent. The mining giant said its first-quarter global iron ore production, including first shipments from its new Simandou mine in Africa, was up 12 per cent, and its copper output was up 9 per cent year-on-year. Chief executive Simon Trott said the scale and quality of Rio’s mines “ensured growth and supply chain resilience against changing operating conditions as we continue to closely monitor the evolving situation in the Middle East”. Larger rival BHP’s shares slipped 0.3 per cent, and Fortescue edged up 0.05 per cent.

In a shift to defensive stocks such as consumer staples, Woolworths rose 0.9 per cent despite this morning’s resumption of a landmark court case brought by Australia’s consumer watchdog, which has accused the retail giant of selling groceries through discounts that weren’t real. Woolies’ lawyers sought to fend off the Australian Competition and Consumer Commission’s accusations that it sold pantry staples in its “Prices Dropped” program at the fake discounts.

The case follows rival Coles’ fortnight-long defence of the same accusations heard by the Federal Court in February, the final judgment for which is reserved until Woolies’ case concludes. Coles shares rose 0.7 per cent. Bottle shop owner Endeavour Group gained 1.5 per cent.

The key financial sector, which accounts for over a third of the market, was flat, with the big four banks putting in a mixed performance. CBA (down 0.3 per cent) and ANZ Bank (down 1.7 per cent) both slipped, while National Australia Bank was up 0.5 per cent and Westpac up 0.6 per cent.

On Wall Street overnight, US stocks gave back a bit of their recent record-breaking rally. The S&P 500 slipped 0.2 per cent from its all-time high for just its second drop in 14 days after the US seized an Iranian-flagged cargo vessel that it said had tried to evade its blockade of Iranian ports. The Dow Jones Industrial Average dipped less than 0.1 per cent, and the Nasdaq composite fell 0.3 per cent.

Worries that Iran could keep petroleum pent up in the Persian Gulf if it continues to block tankers from exiting the Strait of Hormuz prompted the turnaround from the prior trading day on Wall Street, when stocks soared and oil prices tumbled after Iran said on Friday it was reopening the strait to commercial traffic. That enthusiasm vanished quickly after Iran closed the strait again on Saturday as America pressed ahead with its blockade of Iranian ports.

Monday’s relatively muted moves suggest investors still see a possibility of a US-Iranian agreement that could get oil flowing again from the Middle East to customers worldwide. It would be in both countries’ economic interests to end the war.

Companies with big fuel bills fell to some of Wall Street’s larger losses following the rise in crude’s cost, as they have through much of the war. Norwegian Cruise Line Holdings dropped 3.5 per cent, and Royal Caribbean Group lost 1.1 per cent.

United Airlines sank 2.8 per cent, and American Airlines fell 4.2 per cent after American said it was not interested in a merger with United. Airline stocks had flown higher last week following a report saying United wanted to combine with its rival.

One big reason the US stock market has been so strong recently is the big profits that US companies have been reporting for the first three months of 2026, as well as expectations for continued growth.

While reporting stronger earnings for the latest quarter than analysts expected, several of the biggest US banks said last week that they see the US economy remaining resilient, particularly because of solid spending by US consumers.

“Despite geopolitical risks, the earnings recovery remains intact,” according to Morgan Stanley strategists led by Michael Wilson. It’s remained so solid that analysts have even raised their profit expectations since the war began for the spring of 2026.

With AP, Bloomberg

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