Wall Street tech selloff and an Iran flashpoint set the ASX up for a softer open, US CPI due tonight

Sentiment: mixed ASX 200 futures: softer open indicated, around -0.2%

Wall Street's pivot out of mega-cap tech resumed (Nasdaq -0.97% to 25,678.82) and a late-session Iran flashpoint, after President Trump signalled possible renewed strikes, dragged the S&P 500 to a 7,238 intraday low before it recovered to close -0.26% at 7,386.65. Apple was the heaviest mega-cap, down 3.64% to US$290.55, while the VIX jumped 5.02% to 19.87 after spiking to 23.34 at the lows. The ASX opens ahead of tonight's US CPI at 10:30pm AEST, where headline inflation is tipped at +4.2% year-on-year with Fed rate-hike odds rising.

What drove the overnight session

• Iran flashpoint: Trump's comment that strikes on Iran could resume sent the S&P 500 to a 2.3% intraday drop before it pared the loss to -0.26%; the VIX hit 23.34 intraday. Brent crude rose 1.04% to US$92.40, a tailwind for AU energy producers WDS.AU, STO.AU and BPT.AU.
• Tech rotation resumed: the pivot out of heavyweight tech lifted the Dow (+0.17%) and Russell 2000 (+0.41%) while the Nasdaq fell 0.97%. Apple -3.64%, AMD -3.02%, Tesla -3.00% and Super Micro -7.62% led the decline, though Nvidia (-0.22%) and Alphabet (+0.26%) held. Read-through for AU tech: WTC.AU, XRO.AU and NXT.AU.
• Pre-CPI caution: the US 10-year yield eased 2.4bps to 4.528% on a safety bid, and US CPI lands tonight at +4.2% y/y consensus. Rate-sensitive AU sectors, banks and REITs, trade defensively into the print.
• Gold offered no safety bid: gold fell 0.61% to US$4,260/oz despite the risk-off tone, a soft read for NST.AU, EVN.AU and NEM.AU.

Overnight Wall Street

• S&P 500: 7,386.65 (-0.26%)
• Nasdaq: 25,678.82 (-0.97%)
• Dow: 50,872.11 (+0.17%)
• VIX: 19.87 (+5.02%)

The session split along the fault line that has run through early June: money left mega-cap tech and found the Dow's industrials and value names. S&P 500 technology and energy did the damage, and the Nasdaq's 0.97% fall made it the weakest major index. Breadth confirmed the rotation: the Russell 2000 rose 0.41% even as the Nasdaq sank. The intraday round-trip stood out: a 2.3% drop on the Iran headline, then a recovery that left the Dow and small caps green by the bell.

Commodities & FX (AU-relevant)

• Gold: US$4,260/oz (-0.61%)
• Brent: US$92.40 (+1.04%)
• Iron ore 62% Qingdao: near US$101/t (soft, close to a two-month low)
• AUD/USD: 0.7024 (-0.03%)

Oil was the clearest commodity move, with Brent up 1.04% and WTI up 1.05% to US$89.13 on the Iran flashpoint. That supports AU energy producers at the open. Iron ore sits near US$101/t, close to a two-month low on ample supply and subdued China demand, a soft backdrop for BHP.AU, RIO.AU and FMG.AU. The Australian dollar held at 0.7024 with the US dollar index flat near 100.

Key themes for ASX open

• Energy: Brent +1.04% to US$92.40 supports WDS.AU, STO.AU and BPT.AU.
• Tech: Nasdaq -0.97% and Apple -3.64% point to pressure on WTC.AU, XRO.AU and NXT.AU.
• Gold miners: gold -0.61% to US$4,260/oz, with no safety bid, weighs on NST.AU, EVN.AU and NEM.AU.
• Banks and REITs: the US 10-year at 4.528% and US CPI tonight keep CBA.AU and the big four in a cautious frame.
• Consumer: June consumer sentiment at 80.6 (-2.9%), near 50-year lows, keeps a weak-demand cloud over WES.AU and JBH.AU.

Economic calendar today

• 11:30am AEST: China May CPI/PPI, with CPI tipped at +1.2% y/y
• 10:30pm AEST: US CPI (May), headline tipped +0.5% m/m and +4.2% y/y, core +0.3% m/m and +2.9% y/y
• The US print sets the tone for Fed rate expectations into the next FOMC

What to watch

• Whether ASX energy (WDS.AU, STO.AU) opens firm on the Brent move while tech-aligned names track the Nasdaq's 0.97% fall.
• The AUD at 0.7024 into tonight's US CPI; a hot print would test the US dollar index near 100.

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