ASX braces for RBA call as Dow -557 on Iran-UAE strikes

Sentiment: bearish ASX 200 futures: SPI -66 pts (-0.75%)

The S&P/ASX 200 closed Monday at 8,729.8; SPI futures imply a -0.75% open into Tuesday's Reserve Bank decision, with markets pricing an 86% probability of a 25bp hike to 4.35%. Wall Street closed lower on a Middle East risk bid: the Dow shed 557 points (-1.13%) on reports of Iranian strikes on a US patrol boat and the UAE intercepting Iran-launched missiles, plus a targeted ADNOC oil carrier. Materials -1.62% and Industrials -1.02% drove the US session.

Overnight Wall Street

The Dow Jones closed at 48,941.9 on 4 May 2026, down 557 points or 1.13%. S&P 500 -0.41% to 7,200.75; Nasdaq held at -0.19% to 25,067.80 as mega-cap tech limited the index drop. VIX +7.65% to 18.29 — under the 20 level but the largest daily move since mid-April.

• Dow: 48,941.9 (-1.13%)
• S&P 500: 7,200.75 (-0.41%)
• Nasdaq: 25,067.80 (-0.19%)
• VIX: 18.29 (+7.65%)

Energy (+0.95%) was the only meaningfully positive S&P 500 sector; Tech eked out +0.02% as Materials (-1.62%) and Industrials (-1.02%) led the headline decline. Financials, Consumer Discretionary and Real Estate all closed lower, with Real Estate notably soft on the renewed bid in US 10-year yields. Mega-cap concentration cushioned the Nasdaq print but did not extend to the Dow's industrial complexion.

Commodities & FX (AU-relevant)

• Gold: US$4,527.60/oz (-0.13%) — held above US$4,500 despite VIX +7.65%
• Brent: US$113.95 (-0.43%) — settled lower from intraday spike on Gulf headlines
• WTI: US$104.97 (-1.36%) — biggest commodity drop on the AU-relevant complex
• Copper: US$5.864/lb (+0.30%)
• Iron ore 62% Qingdao: ~US$108/t (Yahoo TIO=F print of US$161.91 rejected as data anomaly)
• AUD/USD: 0.7170 (+0.01%)

For the open: BHP.AU, RIO.AU and FMG.AU enter with a US Materials -1.62% lead and an unchanged iron-ore reference at ~US$108/t. WDS.AU and STO.AU into Brent US$113.95 (-0.43%) — absolute price elevated, day session direction down. Gold producers NEM.AU and NST.AU face a flat-AUD overnight at 0.7170, removing FX translation as a sentiment offset.

Key themes for ASX open

• RBA decision today, 14:30 AEST — markets price 86% probability of a 25bp hike to 4.35%; CBA.AU, NAB.AU, WBC.AU and ANZ.AU sit on the NIM-tailwind side if the hike is delivered, with all Big Four bank desks tipping a hike per local sell-side.
• Rate-sensitive de-rate risk — GMG.AU, SCG.AU, CHC.AU, XRO.AU and WTC.AU enter with a hike at 86% market-implied; the 14% chance of a hold becomes the asymmetric scenario for short positioning.
• Gold producers face flat-AUD overnight — NEM.AU, NST.AU into gold at US$4,527.60/oz (-0.13%) and AUD/USD 0.7170; no FX translation cushion versus the local price.
• Energy: elevated price, soft session — WDS.AU, STO.AU into Brent US$113.95 (-0.43%) and WTI US$104.97 (-1.36%); price level remains supported by Gulf supply concerns.
• Cyclical drag from US — Materials -1.62% + Industrials -1.02% align with SPI futures -0.75% (-66 pts); BHP.AU, RIO.AU and FMG.AU as the direct local proxies for the overnight cyclical complexion.

Economic calendar today (AEST)

• 14:30 — RBA Cash Rate Decision (consensus +25bp to 4.35%; market-implied 86% probability)
• 15:30 — RBA Governor post-decision press conference and Q&A
• Pre-open — Final SPI roll print before the 09:50 AEST cash open
• US overnight (Tue→Wed AEST) — JOLTS job openings for March, plus continuing FOMC speakers; AUD/USD 0.7170 sits at the lower end of its April range

What to watch

• VIX at 18.29 (+7.65%) — under the 20 level; a break above 20 would mark the highest print since the late-March drawdown.
• AUD/USD reaction to RBA — pair flat at 0.7170 going in. With a hike 86% priced, the asymmetric move sits with a hold or dovish forward guidance — not the hike itself.
• Materials breadth into the open — US Materials -1.62% sets a -1.62% lead; iron ore at ~US$108/t offers no offset for BHP.AU, RIO.AU and FMG.AU.
• Bank desk reaction at 14:30 — CBA.AU, NAB.AU, WBC.AU and ANZ.AU price action immediately post-decision will indicate whether the hike was already in spot.
• Brent under US$114 vs above US$115 — WDS.AU and STO.AU exposed to the next 24-hour Gulf headline cycle.

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