West Texas Intermediate traded below $US57 a barrel, while Brent edged toward $US60. Oil is on track for a yearly loss on expectations for a swelling global surplus as OPEC+ brings back idled production and other producers pump more. Local oil and gas giants Woodside and Santos retreated, trading down 2.3 per cent and 2.1 per cent, respectively.
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Mining stocks extended losses after Monday’s sell-off, which had been triggered by falling commodity prices after China’s Ministry of Commerce said on Friday that exporters must seek permission from January 1 to ship a broad range of products, including steel used in construction, cars and consumer goods. Iron ore giants BHP and Fortescue shed 0.1 per cent and 2.8 per cent, respectively, while Rio Tinto edged up 0.3 per cent.
Gold miners fell as bullion dropped as much as 0.6 per cent to near $US4280 an ounce, with investors locking in recent gains while waiting for the raft of US data this week. Northern Star Resources shares fell 2.4 per cent. Evolution Mining dropped 1.4 per cent and Newmont slipped 0.6 per cent.
Rollercoaster stock Droneshield surged 22.1 per cent after the defence technology provider said it received a contract worth $49.6 million to provide handheld counter-drone systems, accessories and software updates to a European reseller supplying a military customer in the region.
On Wall Street overnight, the S&P 500 slipped 0.2 per cent, even though more stocks rose than fell within the index. The Dow Jones edged down 0.1 per cent, and the Nasdaq composite fell 0.6 per cent.
Helping to keep the US market in check were stocks in the artificial-intelligence industry, which were mixed following their dramatic price swings last week.
Nvidia, the chip company that’s become the face of the AI boom, rose 0.7 per cent. It was one of the strongest forces pushing upward on the S&P 500 on Monday after dropping 4.1 per cent last week.
But Oracle sank another 2.7 per cent following its 12.7 per cent tumble last week, which was its worst in more than seven years. Broadcom fell 4.5 per cent.
AI stocks have been shaky on worries that all the billions of dollars flowing into chips and data centres may not produce a big-enough payoff of profits and productivity to make it worth it. The doubts are causing cracks for the industry, whose earlier surges was the main driver for the US market’s rally to records.
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Besides AI, the main focus on Wall Street this week will be what several big updates on the US economy’s health say.
On Tuesday (early Wednesday AEDT) will come the jobs report for November, and economists expect it to show employers added 40,000 more jobs than they cut during the month. Thursday will bring an update on the inflation that US consumers are feeling, and economists expect it to show inflation was at 3.1 per cent last month, still higher than households and policymakers would like.
Such data is under the microscope because the Fed is trying to figure out if a slowing job market or high inflation is the bigger problem. It’s in a potentially tough spot because fixing one of those problems by moving rates would likely worsen the other in the short term.
The hope on Wall Street is that the job market weakens, but only by a little: enough to get the Fed to cut rates but not so much that it triggers a recession. Wall Street loves lower rates because they can give the economy and prices for investments a boost, even if they also may worsen inflation.
