DAMIAN J. TROISE
The Australian sharemarket is expected to open flat on Monday after last week ended with Wall Street near record levels, while trade tensions between the U.S. and Europe escalated over the weekend.
Futures are pointing to the S&P/ASX200 opening 1 point lower, at 8876, after a choppy session on Wall Street last Friday (US time) in which U.S. shares edged lower. The ASX chalked up five days in a row of gains last week.
The wobbly day for stocks closed out a week of similar movements for major indexes amid profit reports from banks and updates on inflation.
Over the weekend, there was also an escalation in trade tensions between the U.S. and major European nations, after president Donald Trump announced rising tariffs on eight European nations until Greenland is sold to the US.
Major European Union states decried the tariff threats over Greenland as blackmail on Sunday. France proposed responding with a range of previously untested economic countermeasures.
As early trade kicked off in Asia-Pacific, the euro fell 0.2 per cent to around US$1.1572, its lowest since November. Sterling also dipped, while the yen firmed against the dollar.
In its final session of the week, the S&P 500 fell 4.46 points, or 0.1 per cent, to 6,940.01. It is sitting just below its record, which was set early last week. The Dow Jones Industrial Average fell 83.11 points, or 0.2 per cent, to 49,359.33. The Nasdaq composite fell 14.63 points, or 0.1 per cent, to 23,515.39. Each index notched weekly losses.
Smaller company stocks fared better. The Russell 2000 eked out a 0.1 per cent, while also notching a 2 per cent gain for the week.
Technology stocks were the strongest forces behind the market’s moves throughout most of the day. Several big technology stocks made strong gains and helped offset losses elsewhere.
Broadcom rose 2.5 per cent and Micron Technology rose 7.8 per cent. The semiconductor companies are among several Big Tech companies with outsized valuations that often push the market higher or lower.
A handful of regional U.S. banks reported their earnings following mixed reports from their larger peers. Pittsburgh’s PNC jumped 3.8 per cent after it beat Wall Street’s fourth-quarter targets, but Regions Financial fell 2.6 per cent after reporting results that missed forecasts.
Outside of the banking sector, transport company J.B. Hunt Transport Services fell 1 per cent after reporting mixed quarterly financial results.
The latest round of earnings updates from companies could help give Wall Street a better sense of how consumers are spending their money and how businesses are operating amid economic concerns brought on by inflation and tariffs. Results from the technology sector are being scrutinised by investors trying to figure out whether the high stock prices fuelled by the craze around artificial intelligence are justified.
“Despite the strong start to 2026, we would not be surprised if markets experience volatility in the coming weeks as fourth quarter earnings progress and the threat of escalating geopolitical tensions remains,” wrote Doug Beath, global equity strategist at Wells Fargo Investment Institute, in a note to investors.
Crude oil prices rose after dropping sharply on Thursday. The price of U.S. crude oil rose 0.4 per cent to US$59.44 and the price of Brent crude on Friday, the international standard, rose 0.6 per cent to US$64.13. Oil prices have been volatile amid widespread protests in Iran against that country’s leadership and President Donald Trump’s warnings that the U.S. “will come to their rescue.”
Gold prices, which have also been volatile this week, fell. Prices for the precious metal, often viewed as a safe haven amid economic and geopolitical uncertainty, fell 0.6 per cent, but are still up more than 5 per cent so far in January.
Treasury yields moved higher in the bond market. The yield on the 10-year Treasury rose to 4.23 per cent from 4.17 per cent late Thursday.
