ASX slumps; oil surges over $US100; Tesla and Alphabet tumble

Staff writersUpdated July 24, 2026 — 10:59am,first published July 24, 2026 — 5:24amThe Australian sharemarket lost ground on opening after the price of oil shot to its highest level since May following increased fighting in the Middle East that threatens to slow the global flow of crude.The S&P/ASX 200 fell 57.5 points or 0.65 per cent to 8781.5 within 10 minutes of opening on Friday after adding just 0.2 per cent the day before. By around 10.30am, the market had regained some composure, swinging back up.Rising oil prices and a slump for Alphabet and Tesla weighed down Wall Street. APBut seesawing, nervous trade is likely to rule the day given events in the Gulf and jitters in overseas markets. Three of the bourse’s 11 sectors stood ground: energy firms, banks and utility companies, while the rest fell away. The Australian dollar was level at US69.69¢.Oil and gas majors Woodside and Santos each gained more than 2 per cent. Refiner Ampol was flat.Stocks in the US had fallen overnight under the pressure of rising oil prices, which raise costs for businesses and erode their customers’ ability to spend. The price for a barrel of Brent crude oil, the international standard, jumped 7 per cent to settle at $US100.69.It touched $US102 during Thursday, the highest price since May for the most actively traded Brent contract in the market. The cause: attacks on two Saudi oil tankers in the Red Sea. That threatens another avenue that oil companies use to move their crude from the Middle East to customers worldwide, along with the Strait of Hormuz.At the same time as oil climbed, sharp drops for two of Wall Street’s most influential companies, Alphabet and Tesla, yanked the US stock market to its worst loss in a month.On the ASX, NAB, ANZ and Macquarie lifted the finance sector, while the behemoth Commonwealth Bank barely moved. Westpac also fell marginally.Australia’s big miners were again trending downwards. Iron ore producers BHP, Rio Tinto and Fortescue all lost ground. Gold miners were pummelled as better-than-expected local employment figures raise the chance of the Reserve Bank hiking interest rates further, making returns from bonds and cash more attractive. Northern Star shed 2.94 per cent and Evolution Mining fell 2.68 per cent.Tech firms, WiseTech Global, Zero and NextDC, the other major market movers of late, slumped in line with steep hits overseas. Worries about whether profits will cover the huge capital outlays required to power AI have been shaking the industry broadly in recent weeks, leading to big swings for global markets.In the US, the S&P 500 fell 1.2 per cent and is on track for its first back-to-back weekly loss since March. The Dow Jones dropped 506 points, or 1 per cent, and the Nasdaq composite sank 2.2 per cent.Underscoring the importance of Middle East sea routes for the US economy, President Donald Trump threatened “major military punishment” against the Houthi rebels in Yemen, who are backed by Iran, if they keep attacking ships.It was just a few weeks ago that Brent had dropped below $US72 per barrel, roughly back to where it was before the United States and Israel attacked Iran to begin their war, on hopes that a wind-down in the war would fully reopen the Strait of Hormuz.The jumps in oil prices will worsen inflation, just when it had begun to decelerate by more than economists expected. That in turn could push the Federal Reserve and other central banks to raise interest rates, which would slow economies and undercut prices for stocks and other investments.The European Central Bank held its main interest rates steady at its meeting on Thursday. But traders are betting on a 36 per cent chance the Fed will hike the federal funds rate at its meeting next week. That’s up from the nearly 12 per cent probability seen a week ago, according to data from CME Group.An increase by the Fed would be the first since 2023.Higher oil prices pushed the yield of the 10-year Treasury up to 4.69 per cent from 4.67 per cent late Wednesday and from just 3.97 per cent before the war with Iran began. That’s a significant increase, and it’s already brought long-term US mortgage rates to their highest levels in nearly a year.On Wall Street, stocks of companies with big fuel bills fell to sharp losses on worries about higher expenses.American Airlines fell 8.4 per cent even though it reported a much bigger profit for the spring than analysts expected, something that usually sends a stock’s price higher. It raised airfares, which helped it offset its higher fuel prices, during the latest quarter.One of the heaviest weights on the US stock market was Tesla, which tumbled 14.5 per cent after Elon Musk’s electric-vehicle company reported a weaker profit for the latest quarter than analysts expected. Because it’s one of the largest stocks in the S&P 500 by market value, its stock has more influence on the index than nearly every other.One of the few that’s larger is Alphabet, and its stock fell 7.1 per cent even though the parent company of Google delivered stronger profit and revenue than analysts expected. Investors focused instead on how much Alphabet is planning to spend on artificial-intelligence investments.Indexes fell sharply in Europe after oil prices jumped. Indexes in Asia were stronger earlier in the day, and South Korea’s Kospi jumped 4.4 per cent.APThe Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.From our partners