ASX set to slip as Wall Street falls; oil prices rise; $A slumps
US stock indexes are losing ground on Tuesday, while oil prices rise again.
The S&P 500 was down 0.8 per cent in afternoon trading following signals that one of the US economy's main engines, spending by households, is weakening while Israel's conflict with Iran may be worsening. The Dow Jones lost 267 points, or 0.6 per cent, and the Nasdaq composite was 0.9 per cent lower.
The Australian sharemarket is set to retreat, with futures at 4.53am AEST pointing to a loss of 34 points, or 0.4 per cent, at the open. The ASX dipped by 7 points on Tuesday. The Australian dollar slumped. It was 0.7 per cent lower at 64.71 US cents at 5.07am AEST.
Treasury yields also fell in the bond market after a report said shoppers spent less last month at US retailers than the month before and than economists expected. Solid such spending has been one of the linchpins keeping the economy out of a recession, but part of May's drop may have simply been a return to more normal trends.
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In April, some shoppers had rushed to buy automobiles to get ahead of President Donald Trump's tariffs.
'Today's data suggests consumers are downshifting, but they haven't yet slammed the brakes,' according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management
Trump, meanwhile, left a Group of Seven summit early and warned that people in Iran's capital should evacuate immediately. It took only about eight hours for Trump to go from suggesting a nuclear deal with Iran remained 'achievable' to urging Tehran's 9.5 million residents to flee for their lives.
Israel's continuing fight with Iran has the potential to drive up prices for crude oil and gasoline because Iran is a major producer of oil, and it sits on the narrow Strait of Hormuz, through which much of the world's crude passes.
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