The Hormuz attacks and plummeting AI stocks are expected to weigh on the Australian sharemarket, with futures pointing to a slight fall.

The latest attacks in the Strait of Hormuz, a global shipping route, threaten to choke off the world’s flow of energy. Brent crude, the international standard, has risen 2.9 per cent to $74.11, putting upward pressure on inflation and Treasury yields. The yield on the 10-year Treasury has climbed to 4.52 per cent from 4.48 per cent.

Futures markets point to a 20-point, or 0.23 per cent, slide in the S&P/ASX 200 index, with the dollar edging lower against the US greenback to US69.32¢. In the US, the S&P 500 fell 0.4 per cent overnight, but stocks in the artificial intelligence industry were a major drag on the market.

Samsung Electronics tumbled 6.9 per cent in Seoul despite offering a strong forecast for upcoming results, adding to concerns about AI stocks worldwide. Micron Technology fell 5 per cent, and Intel sank 9.1 per cent, weighing heavily on the market. Nvidia, the largest stock on Wall Street by value, rose 1.1 per cent after slipping earlier in trading.

The weakness in Asia began with Samsung, which has already more than doubled in value this year. Investors seem to be worried that AI may not produce enough productivity and profits to justify the high prices of those stocks. In Australia, the tech-heavy ASX 200 index is home to many companies involved in the development of artificial intelligence, including Xero and Altium.

Rivian Automotive dropped 15.1 per cent after the electric vehicle company said it’s selling 75 million shares of its stock, diluting the ownership stakes of earlier shareholders. Vertex Pharmaceuticals fell 1 per cent after it agreed to buy Crinetics Pharmaceuticals for $85 per share in cash.

A tense situation in the Middle East and plummeting AI stocks are a one-two punch for investors on the Australian sharemarket.

The latest attacks in the Strait of Hormuz come as tensions between countries in the region continue to simmer. The global implications of these attacks are significant, as the strait is a critical artery for global trade.

The S&P/ASX 200 index will be watching closely the outcome of the situation in the Middle East.

### Key Facts

  • 20-point potential slide in the S&P/ASX 200 index
  • 2.9 per cent rise in Brent crude
  • 4.52 per cent yield on the 10-year Treasury
  • 0.4 per cent fall in the S&P 500
  • 6.9 per cent drop in Samsung Electronics
  • 5 per cent fall in Micron Technology
  • 9.1 per cent dip in Intel
  • 1.1 per cent rise in Nvidia

Australian investors are bracing for a volatile market as tensions in the Middle East and the plummeting of AI stocks on Wall Street make their mark on the Australian sharemarket.