The S&P/ASX 200 fell 1.7% to 8,285 on Monday, extending the prior week’s declines and closing at its lowest level since May 2025, as escalating geopolitical risks continued to weigh on sentiment. Tensions in the Middle East remained elevated after US President Trump threatened to strike Iranian power facilities if the Strait of Hormuz remains closed, prompting Tehran to warn it would target key US and Israeli assets in response.
On the domestic front, investors are looking ahead to Wednesday’s inflation report, with headline inflation forecast to remain unchanged at 3.8%. The release comes on the heels of the RBA’s narrowly split decision to raise the cash rate to 4.1%, delivering a back‑to‑back hike for the first time since mid‑2023 and unwinding two of last year’s three cuts as the central bank works to rein in stubborn inflation.
Mining stocks led the sell-off, with notable declines in BHP Group (-2.7%) and Rio Tinto (-2.8%). Gold producers also underperformed, including Newmont Corporation (-5.8%) and Northern Star Resources (-5.7%).
