ASX Sinks 2% at Open as Wall Street Sell-Off, US Tariffs Rattle Market Nerves

Key Highlights:

• ASX 200 plunges 2% to 7,359.6 in early trade, snapping yesterday’s rally
• All sectors in the red; tech, energy, and materials lead sharp declines
• Trade tensions escalate as US tariffs loom; Aussie dollar retreats
• Volatility ticks higher amid global uncertainty
   

The Australian share market resumed its downward slide Tuesday morning, with the S&P/ASX 200 diving 2.00% to 7,359.6 by 10:25am AEST, reversing Monday’s modest gains. The pullback mirrors steep overnight losses on Wall Street and comes ahead of new U.S. tariffs expected to take effect later today, sending fresh shockwaves through global equity markets.

All 11 sectors opened in the red, led by deep losses in energy, materials, and technology. The All Ordinaries index dropped 2.00%, and the Small Ordinaries shed 2.22%, reflecting broad investor risk aversion.

The Australian dollar was not spared, sliding to US$0.5953 (-0.09%) amid weakening global sentiment and risk-off flows.

US Tariffs Cast a Long Shadow

The market decline comes as optimism for near-term trade deals fades. Additional U.S. tariffs of up to 50% on select countries are set to take effect at 2:01pm AEST, escalating fears of a full-scale trade war. While markets had initially hoped for last-minute negotiations, those expectations have largely evaporated, fueling investor anxiety across sectors.

“The Australian share market has fallen 2 per cent at the open, resuming its slide after yesterday’s rally, following more falls for stocks on Wall Street,” analysts noted. “The Aussie dollar also took a hit overnight.”

The pressure coincides with a major risk-off mood that saw the NASDAQ plunge 2.15%, the S&P 500 fall 1.57%, and the Dow Jones retreat 0.84% overnight. Wall Street’s slump has rippled across global indices despite gains in Asian markets like the Nikkei (+6.03%) and Shanghai Composite (+1.58%).

Broad-Based Selling Across Sectors

Sellers were in complete control at the open. Materials (-3.44%), Energy (-3.74%), and Technology (-2.62%) were hardest hit, driven lower by falling commodity prices and geopolitical headwinds. The ASX 200 Resources Index plunged 3.55%, while the Tech Index dropped 2.32%.

Major banks also succumbed to selling pressure, dragging the ASX 200 Banks Index down 1.75%. Defensive sectors like Staples (-1.37%), Health Care (-1.37%), and Utilities (-0.78%) offered no haven.

Heavyweight laggards included BHP, Woodside Energy, and Afterpay parent Block Inc, which all faced early selling. Among small caps, WA1 Resources, Om Holdings, and Domain Holdings also slid sharply.

Commodities & Currency React to Global Jitters

Oil and metals prices extended their retreat, with WTI crude falling 3.56%, copper sliding 2.35%, and silver down 1.15%, dragging sentiment in resources. Gold held relatively steady at US$2,986/oz, down just 0.14%, as investors balanced safe-haven demand with a stronger U.S. dollar.

In currency markets, the Australian dollar fell below US$0.60, while the Chinese yuan, yen, and euro also edged lower against the greenback. Traders now eye today’s tariff implementation and upcoming U.S. CPI data for direction.

Outlook: Volatility Here to Stay

The S&P/ASX 200 Volatility Index (VIX) sits at 19.9, hovering near the top of the “normal” range and suggesting that investor sentiment remains on edge. While a sharp rebound in Asian equities has offered some relief, sentiment in Australian markets remains fragile.

With little clarity on trade policy and geopolitical friction showing no signs of easing, market participants are advised to buckle up for further swings. “Follow the day’s financial news and insights from our specialist business reporters on our live blog,” the ASX advised, hinting at a potentially turbulent day ahead.