Live: War and AI worries drag down Wall Street, ASX set to rise

Mon 20 Jul 2026 at 6:53amMon 20 Jul 2026 at 6:53amMarket snapshotASX 200 futures: +0.6% to 8,814 pointsASX 200 (Friday): -0.5% to 8,798 pointsAustralian dollar: -0.2% to 69.80 US centsWall Street (Friday): S&P 500 -1.0%, Dow -0.8% Nasdaq -1.5%Europe (Friday): Dax -0.3%, FTSE +0.3%, Eurostoxx -0.8%Spot gold: +1.2% to $US4,017/ounceOil: Brent futures +4.6% to $US88.10/barrel, WTI futures +4.5% to $US82.49/barrelIron ore (Friday): flat at $US100.10/tonneCopper (LME, Friday): -0.3% to $US13,543/tonneBitcoin: -0.4% to $US64,433Prices current at around 7:00am AESTMon 20 Jul 2026 at 7:20amMon 20 Jul 2026 at 7:20amAI anxiety and war weigh on Wall StWorries about war and AI stock valuations saw Wall Street extend its decline on Friday.S&P 500: -1.0%Dow: -0.8%Nasdaq: -1.5%Over the week, the S&P 500 fell 1.6%, compared to a 0.7% decline in Europe and an even more modest 0.1% fall on the ASX.It's still too early to call the listing AI sector a chip-wreck, given the pullback is relatively small to the substantial gains the sector has made in the past year. However, a trend is developing.The broadest measure of the chip/data memory sector valuations, Philadelphia SE Semiconductor Index, logged its steepest weekly loss in over a year and has tumbled over 18% so far in July.Add some pre-July losses into the equation and technically the sector is now in a "bear market" territory.Even so, the index remains up nearly 65% year-to-date, compared with the S&P 500's nearly 9% gain over the same time frame.Many investors in the artificial intelligence space have begun positioning for a slowdown in the nearly trillion-dollar spending boom, with some active managers already scaling back their exposure."It's like the market has chip fatigue," chief market strategist at Carson Group Ryan Detrick told Reuters."Chip stocks are down three of the last four weeks, and it's the same worries, the same concerns; those stocks got way ahead of themselves, and now they're coming back to Earth."Among the Magnificent Seven group of AI-related megacaps, all but Apple dipped, with Meta and Alphabet suffering the worst of it, down 2.7% and 3.2%, respectively.Outside the tech sector, things seem to be going swimmingly, rather than floundering.Second-quarter earnings season is still in its early days, with 49 of the companies in the S&P 500 having reported.Of those, 90% have delivered better-than-expected results, according to LSEG.Analysts now see year-on-year S&P 500 earnings growth of 26%, in aggregate, up from the 19% expectations three months ago."It's early in earnings season, but we're off to a tremendous start," Mr Detrick said."Over the next several weeks, we're going to get a lot more sectors and industries reporting. But so far, the banks have really started us off on the right foot."Chips vs S&P 500 (LSEG, Datastream)European stocks also slipped, although the UK's FTSE made a modest gain.ASX 200 futures are priced for a gain this morning, but trading closed before news of the deaths of at least two US servicemen filtered through and the missile and drone attacks intensified.Oil prices continued to climb in step with growing tensions in the Gulf region.Brent futures: +4.6% to $US88.10/barrelWTI futures: +4.5% to $US82.49/barrelFor the week, both key benchmarks gained around 16%."The market is reacting to the increasing hostilities between Iran and the United States that have culminated this week with nightly attacks on Iranian infrastructure and retaliation by Iran on its neighbours' infrastructure," President of Lipow Oil Associates, Andrew Lipow said."If more tankers come under fire and become damaged, we're going to see oil prices continue to move up as shipowners simply refuse to enter the Persian Gulf."The heightened tensions helped support the US dollar, thanks to its "safe haven" reputation.However, the Aussie dollar still managed to end the week higher overall at just under 70 US cents, capping a third successive week of gains.With ReutersMon 20 Jul 2026 at 6:48amMon 20 Jul 2026 at 6:48amGood morningWelcome to another day on the ABC markets and finance blog.Stephen Letts from ABC business limbering up for blow-by-blow coverage of the day's events, where every post is hopefully a winner, but none should be construed as financial advice.Wall Street's growing anxiety over AI and chip-related stocks saw its key indices all fall — a disappointing close to a generally disappointing week, despite solid earnings results starting to roll in.The ASX futures punters don't seem overly worried, though.When trading closed on Saturday morning, ASX 200 futures pointed to a 0.6% gain this morning, although that was before news of a further escalation in the US-Iran war.The deaths of at least two US servicemen, another deluge of missile and bomb strikes from both sides in the conflict, apocalyptic threats from the White House and a growing realisation that maybe Iran isn't desperate for a deal are not exactly harbingers of serenity on the markets.Certainly, the oil price looks likely to come under renewed pressure today.As always, the game's afoot, so let's get blogging.