ASX 200 set for a soft open after a big tech selloff cut the Nasdaq 1.32%

Sentiment: mixed ASX 200 futures: pointing lower (US S&P e-minis -0.12%, Nasdaq e-minis -0.23% into the AU open)

The Nasdaq fell 1.32% to 26,166.60 overnight as the biggest US tech names sold off, while the Dow rose 0.29% to 51,712.71 and small caps gained. GOOGL.US lost 4.99% to $349.68, the worst of the giants, after two senior AI researchers quit for rivals and Microsoft's chief executive questioned how much money the race to build frontier models will make. The ASX 200 last traded at 8,816.1, and it holds far less tech than the Nasdaq, so firm gold and a move back into banks and miners should soften the open.

What drove the overnight session

• Big tech sold off: GOOGL.US -4.99%, AMZN.US -4.75%, MSFT.US -3.18%, META.US -2.32%. Investors are asking harder questions about the payoff from AI spending. Alphabet lost a second senior researcher to a rival (John Jumper to Anthropic, after Noam Shazeer went to OpenAI), and a $84.75bn share sale flagged for the third quarter added to the selling. The local read: a soft session for WTC.AU, XRO.AU, TNE.AU and NXT.AU.
• Money moved into value: Dow +0.29%, Russell 2000 +0.83%. With the giants under pressure, cash went into industrials, financials and small caps. AAPL.US (-0.34%) and TSLA.US (+1.14%) held up. That plays to the ASX 200, where banks and miners outweigh tech several times over.
• Yields rose: the US 10-year Treasury yield gained 5.8bp to 4.509% and the 2-year hit 4.232%, its highest since February 2025, on a hawkish Fed and nerves before Friday's US PCE inflation report. Higher yields pressure REITs and tech, and pushed AUD/USD down 0.22% to 0.7000.
• Gold firm, oil up: gold added 0.18% to US$4,210/oz and Brent rose 0.42% to US$78.23. That helps gold miners NEM.AU, NST.AU and EVN.AU, and energy names WDS.AU and STO.AU.

Overnight Wall Street

• S&P 500: 7,472.79 (-0.37%)
• Nasdaq: 26,166.60 (-1.32%)
• Dow: 51,712.71 (+0.29%)
• Russell 2000: 3,004.40 (+0.83%)
• VIX: 17.28 (+2.98%)

This was about the biggest names, not the whole market. Four of the seven giants fell 2% or more and dragged the Nasdaq down 1.32%, yet the Russell 2000 rose 0.83% and the Dow closed higher. The same pattern has run through June: the largest AI names fall while the average stock holds up. The trigger was company news at Alphabet, but the bigger question is how fast more than a trillion dollars of planned AI infrastructure starts to pay off.

Commodities and FX that move the ASX

• Gold: US$4,210/oz (+0.18%)
• Brent: US$78.23 (+0.42%)
• WTI: US$74.24 (+0.51%)
• Iron ore 62% Fe: near US$98/t (SGX, +0.2%)
• AUD/USD: 0.7000 (-0.22%)

Gold held above US$4,200 despite a firmer US dollar and higher yields, which supports the local gold miners. Brent and WTI edged up even as Washington and Tehran reported "promising progress" on a 60-day peace deal that would reopen Strait of Hormuz shipping and normally pull crude lower. Iron ore steadied near US$98 a tonne on Singapore screens, neutral for BHP.AU, RIO.AU and FMG.AU. The Australian dollar slipped to 0.7000; a softer currency lifts the AUD value of US earnings for exporters such as CSL.AU and RMD.AU.

Key themes for ASX open

• Technology: the local sector follows the Nasdaq, so WTC.AU, XRO.AU and TNE.AU face the most pressure from the overnight selling.
• Gold miners: gold near US$4,210/oz supports NEM.AU, NST.AU and EVN.AU after a firm offshore session.
• Banks and value: the move into financials and cyclicals plays to the ASX 200, where the big four banks and the major miners dwarf tech.
• REITs: the 5.8bp rise in the US 10-year to 4.509% is a small negative for GMG.AU and the listed property names.

Economic calendar today

• 09:00 AEST: Australia's monthly business activity survey for June, the early read on manufacturing, services and the wider economy. Prior: manufacturing 50.2, services 48.7.
• Overnight: US S&P Global PMIs and Carnival earnings before the US open.

What to watch

• Whether the local market follows the Nasdaq lower or leans on banks and miners to hold near 8,800.
• AUD/USD at the 0.7000 mark, with US yields rising into Friday's PCE inflation print.
• The services side of that survey, last at 48.7 and below the 50 line that separates growth from contraction.
• The local volatility gauge (XVI) rose to 12.6 before the open from 11.7, a small lift in expected near-term swings.

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