ASX dives, following Wall Street’s slump as Trump doubles down on tariffs

The Australian sharemarket traded sharply lower on Tuesday after a pledge by US President Donald Trump to push through tariffs on top trading partners tested Wall Street’s risk tolerances anew, sending bonds up and US stocks to their biggest loss of the year.

The S&P/ASX 200 was down 86.80 points, or 1.1 per cent, at 8158.90 as of 12.39pm AEDT, making Monday’s 0.9 per cent rebound a short reprieve. The S&P/ASX 200 lost 4.2 per cent in February, its worst month in more than two years.

The energy and utilities sectors led the falls, pulled down by slump in oil prices overnight to their lowest level this year after the OPEC oil cartel and its allies affirmed plans to increase crude production from April. Tech stocks tumbled, following a sell-off in the big tech giants on Wall Street.

Mining heavyweights were under pressure after iron ore slumped 2.2 per cent overnight on fears the tariffs on China will hurt demand for Australia’s iron ore from the nation’s biggest export market. Insurance stocks fell amid investor concerns over the potential impact of Cyclone Alfred, which is forecast to make landfall in Southern Queensland later this week.

The energy and utilities sectors were down 2.4 per cent, each, led lower by Woodside (down 2.3 per cent), Santos (down 2.7 per cent), and Ampol (down 1.6 per cent). The nation’s top energy utility Origin Energy lost 4.4 per cent as its stock went ex-dividend.

Tech stocks fell 1.4 per cent after Wall Street’s slump hit AI giant Nvidia and some other formerly high-flying tech stocks particularly hard, with Nvidia tumbling 8.7 per cent overnight. A gauge of the so-called Magnificent Seven megacaps, which include Apple, Microsoft and Google, sank 3.1 per cent. Local tech companies followed, with accounting software maker Xero (down 1.4 per cent), Technology One (down 2.7 per cent) and family tracking app Life 360 (down 6.1 per cent) all lower.

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Insurance stocks fell as large parts of Australia’s East Coast batten down to prepare for Cyclone Alfred. QBE lost 2.9 per cent, Suncorp fell 1.7 per cent and IAG dropped 1.3 per cent. Suncorp CEO Steve Johnston said there was uncertainty about the cyclone’s path and strength, but he urged customers to prepare. “Given this system is likely to affect a large geographical area, we are preparing our response and claims teams to assist impacted customers,” he said.

Iron ore giants BHP, Fortescue Metals Group and Rio Tinto fell 1.3 per cent, 4.3 per cent and 1.7 per cent, respectively, while three of the big four banks were also in the red, though much less so than the broader market. CBA, the biggest stock on the ASX, was down 0.2 per cent, NAB fell 0.8 per cent, and ANZ dropped 0.7 per cent. Westpac was unchanged. Macquarie Group shed 1.6 per cent.