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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West Australian

25 minutes ago

• West Australian

US Defence Secretary Pete Hegseth has called the attack on Iran a success with ‘severe damage and destruction'

US Defence Secretary Pete Hegseth says Midnight Hammer 'did not target Iranian troops or the Iranian people' with a senior Air Force general warning it would be an 'incredibly poor choice' for Iran and its proxies to retaliate. The US launched overnight strikes on three Iranian facilities — Isfahan, Natanz and Fordow — joining Israel's push to cripple Tehran's nuclear program. In an address to media at the Pentagon on Sunday evening (Australian time), Chairman of the Joint Chiefs of Staff Air Force General Dan Caine outlined the operation and said all three nuclear sites sustained 'extremely severe damage and destruction'. 'At midnight Friday into Saturday morning, a large B-2 strike package comprised of bombers launched from the continental United States,' he said. 'As part of a plan to maintain tactical surprise, part of the package proceeded to the West and into the Pacific as a decoy; a deception effort known only to an extremely small number of planners and key leaders here in Washington and in Tampa. 'The main strike package, comprised of seven B-2 spirit bombers, each with two crew members, proceeded quietly to the east with minimal communications. 'Once over land, the B-2s linked up with escort and support aircraft in a complex, tightly timed manoeuvre requiring exact synchronisation across multiple platforms in a narrow piece of airspace, all done with minimal communications. 'At approximately 5pm EST last night, and just prior to the strike package entering Iran, a US submarine in the Central Command Area of Responsibility launched more than two dozen Tomahawk land attack cruise missiles against key surface infrastructure targets at Isfahan. 'As the operation Midnight Hammer strike package entered Iranian airspace, the US employed several deception tactics including decoys as the fourth and fifth generation aircraft pushed out in front of the strike package at high altitude and high speed.' Mr Caine said the US dropped two GBU-57 series MOP weapons on 'several aim points' at Isfahan at about 6.40pm EST. 'The remaining bombers then hit their targets as well, with a total of 14 MOPs dropped against two nuclear target areas,' he said. Mr Caine said all three nuclear infrastructure targets were struck between 6.40pm and 7.05pm EST. 'The Tomahawk missiles (were) the last to strike at Isfahan to ensure we retain the element of surprise throughout the operation,' he said. 'Following weapons release, the Midnight Hammer strike package exited Iranian airspace and the package began its return home. 'We are unaware of any shots fired at the package on the way out ... we retained the element of surprise.' Mr Caine said the US deployed up to 125 aircrafts and 75 precision guided weapons. 'This included fourteen 30,000 pound GBU-57 MOPs marking the first ever operational use of this weapon,' he said. 'Final battle damage will take some time, but initial battle damage assessments indicate that all three sites sustained extremely severe damage and destruction. 'More than 125 US aircraft participated in this mission including B-2 stealth bombers, multiple flights of fourth and fifth generation fighters, dozens of air refuelling tankers, a guided missile submarine and a full array of intelligence surveillance and reconnaissance aircraft, as well as hundreds of maintenance and operational professionals.' Mr Caine said the US remained on 'high alert' and was 'fully postured to respond to any Iranian retaliation or proxy attacks' — a move he warned would be 'an incredibly poor choice'. 'We will defend ourselves,' he said. 'The safety of our service members and civilians remains our highest priority. 'This mission demonstrates the unmatched reach co-ordination and capability of the United States military.' Mr Hegseth said the attack had 'obliterated' Iran's nuclear ambitions but said it 'did not attack Iranian troops or the Iranian people'. 'We devastated the Iranian nuclear program but it's worth noting the operation did not target Iranian troops or the Iranian people,' he said. 'For the entirety of his time in office, President Trump has consistently stated for over 10 years that Iran must not get a nuclear weapon. 'Thanks to President Trump's bold and visionary leadership and his commitment to peace through strength, Iran's nuclear ambitions have been obliterated.'

Sydney Morning Herald

an hour ago

• Sydney Morning Herald

How Iran could hit back after US strike

The US military has a presence at no fewer than 20 bases in the Middle East and the surrounding regions. The majority of these would be within the 2000-kilometre range of Iran's Sejil-2 ballistic missile. American bases in Iraq and Syria would be likely to be first on the hit list, with Tehran then turning its attention to outposts in Arab countries. Any attempt to strike US military facilities in the Middle East is likely to be less effective than the ballistic missile attack on two US bases in Iraq in January 2020 to avenge the assassination of Qassem Soleimani ordered by Trump at the end of his first term. Although the attacks on the two American bases caused no fatalities, partly because Iran had issued a warning, 110 servicemen suffered concussions and other brain injuries because of the force of the impact. So great was the extent of the damage that it may have deterred Trump from retaliating. Washington also has two hulking aircraft carriers, with a third en route, deployed to the Middle East, which would be considered prime targets for Iranian missiles. Targets Israel has proven just how hard ballistic missiles, which are fired up high into the Earth's atmosphere before travelling to the ground at supersonic speeds, can be to intercept, even with what is considered one of the most sophisticated air defence systems in the world. The US military possesses at least two tried and tested surface-to-air systems capable of intercepting ballistic missiles – Patriot and Terminal High Altitude Area Defence, known as THAAD. Loading And they've slowly been redeploying these systems from Asia to the Middle East for months amid mounting tensions between its ally, Israel, and Iran and its Islamist proxies. America's bases in Iraq – Erbil and Ain al‑Asad air bases – have Patriot batteries positioned, which have been used to fend off militant attacks. American commanders also ordered Patriots to be removed from South Korea and placed at Isa Air Base, Bahrain, and Al Udeid Air Base in recent months. Capacity Of course, mass barrages of ballistic missiles can confuse and overwhelm these systems, as witnessed in both Israel and Ukraine. US servicemen and women will, however, be quietly confident that the Israel Defence Force has significantly reduced Iran's capacity to launch hundreds of missiles at once. Iranian salvos have drastically shrunk in size in recent days. What started as 100-projectile blitzes aimed at Israel has been reduced to just dozens of missiles being fired off at any one time. Iran's production capacity has been significantly eroded, with Israel striking various elements of the supply chain in recent days. Loading Fabian Hoffmann, a missile expert, said: 'Iran is heavily constricted in the missile domain. 'The likelihood that Iran can cause a large amount of damage is very, very slim. 'It could also be counterproductive because if you strike American infrastructure, there will be an even greater cost because you risk the Americans getting involved and really getting involved. So I think that's also a huge political consideration.' Proxies Iran's network of regional proxies was always considered its first line of defence. Hezbollah and Hamas were responsible for keeping Israel's military occupied and unable to strike at the Islamic Republic. The Yemen-based Houthi rebels also distracted the West by targeting commercial shipping in the Red Sea. Militants armed by Iran have been responsible for deadly attacks on the US base in Iraq, using one-way attack drones. It's most likely that the Houthi rebels will once again resume targeting American shipping containers travelling through the Red Sea. The militants had briefly paused attacks on American ships after Trump ramped up strikes on the group. In Iraq, Kataib Hezbollah could likely carry out its threat to 'act directly against its [US] interests and bases across the region'. But Israel's decimation of these proxy groups – chiefly Hamas and Hezbollah – in the past year is one saving grace that will comfort the Americans. 'The fact that virtually the only missiles and drones that are launched against Israel right now are coming from Iran is striking,' said Dmitri Alperovitch, chair of the Silverado Policy Accelerator think tank in Washington. Strait of Hormuz Tucked between the Arabian Peninsula and the Persian Gulf's western flank lies one of Tehran's most powerful weapons against the West. Nothing hurts a government more than the price of oil, and this narrow stretch of water between Oman and Iran is vital in the global supply. The Islamic Republic has the means to effectively shut down access to the strait, crippling shipping through the region because there are no alternative routes. The threat of its closure is perhaps why the USS Nimitz, one of America's largest aircraft carriers, is being moved into the region. Iran could quite easily close the strait by mining it, repositioning mobile ballistic missile launchers, and using maritime drones. It employed similar tactics during the so-called Tanker Wars of the 1980s – although it never fully succeeded, largely due to UK Royal Navy and later US Navy efforts to escort commercial vessels through the Gulf. This, US officials fear, would keep American naval warships in the Persian Gulf. 'Mine clearance is one of the US Navy's few weaknesses,' Tom Sharpe, a former Royal Navy officer, wrote in The Telegraph this week. For Tehran, closing the strait is one of the most likely ways of bringing the US into the conflict. Trump was happy to expend billions of dollars in strikes against Houthi rebels, the Iranian-backed militia, when they attempted to snarl up Western shipping through the Red Sea. The US president is acutely aware of global oil prices, and with a fifth of global petroleum shipped through Hormuz, any blockages would be likely to lead to him sanctioning some strikes to restore shipping. The other fact that makes this option particularly nuclear for Tehran is that China, the largest buyer of Iranian oil, uses the strait for shipping its purchases. This hasn't stopped Iran from meddling with shipping through GPS navigation interference. Two tankers collided and caught fire on the narrow stretch of water after allegedly being impacted by the disruption. US officials have claimed the GPS meddling originated from the Iranian port of Bandar Abbas, located just north of the strait. Some analysts believe Iran is unlikely to carry out such threats, fearing it would provoke Arab states into the conflict and complete Tehran's global isolation. Oil fields If the Iranian regime believed it faced an existential crisis or the irreversible destruction of its nuclear program, it could play what analysts describe as its 'last big card' by also attacking energy infrastructure in the Gulf. The world got a glimpse of what could be to come in 2019 when drone and missile strikes hit the Abqaiq and Khurais oil facilities in eastern Saudi Arabia. Yemen's Iran-backed Houthi rebels claimed responsibility – but both the US and Saudi governments accused Iran of orchestrating the attacks. Loading The attacks temporarily knocked out half of Saudi Arabia's oil production, triggering a sharp spike in global energy prices. Abqaiq, which processes 7 million barrels of crude a day – more than two-thirds of Saudi Arabia's production capacity – would almost certainly be a prime target if Iran followed through on its threats. Other potential targets include oil and LNG terminals in Saudi Arabia and the UAE, as well as oil tankers moving through the region's waters. In May 2019, limpet mines damaged three tankers and a bunkering ship off the coast of Fujairah in the UAE. No one claimed responsibility, but Western officials suspected Iranian frogmen were behind the attacks. Cyber Over the years, Iran and its regional proxies have claimed responsibility for numerous cyberattacks against Israel. They include destroying data, phishing campaigns and information operations. Given the threat poses a danger to both civilian and military worlds, the US government has been appealing for information on Iranian hackers responsible for targeting critical infrastructure. A $US10 million ($15.5 million) reward was posted for details on a group, known as CyberAv3ngers, who US officials have linked to the Islamic Revolutionary Guard Corps.

Sky News AU

an hour ago

• Sky News AU

Donald Trump ‘understood the nature' of Iran's nuclear threat to the world

United States Defence Secretary Pete Hegseth says US President Donald Trump 'understood the nature' of the Iranian nuclear program's threat. 'The president has made it very clear, he's looked at all of this, all of the intelligence, all of the information and come to the conclusion the Iranian nuclear program is a threat,' Mr Hegseth said. 'And was willing to take this precision operation to neutralise that threat.'