Live: ASX to fall, US tech rout rattles markets

The Australian Securities Exchange (ASX) is expected to decline following a sharp drop in US technology stocks, particularly Meta, as it plans to increase its artificial intelligence (AI) spending. This has raised concerns about the potential return on investment. Brent crude oil prices surpassed $113 a barrel due to additional attacks by the Houthi group on Saudi Arabia and worries about a new conflict between the United States and Iran.

Treasurer Jim Chalmers will speak at the Citi A50 Economic Forum in Sydney, emphasizing Australia as an island of stability amidst uncertainty. He acknowledges that Australia faces global challenges but remains a reliable option due to its resilience. Chalmers also highlights that Australia's productivity has been insufficient for too long, and higher inflation is affecting domestic activity and labor markets.

The tech sector experienced a sell-off overnight, with Meta, the parent company of Facebook, posting its biggest drop since July (-7%) after raising its AI spending. Despite meeting earnings expectations, investors were not pleased with the additional investment in AI. As a result, other AI-focused companies also saw significant declines.

Investors have been flocking to safer assets, driving yields down and creating a classic safe-haven day in the US Treasury market. The 10-year Treasury yield dropped to its lowest level in nearly a month, falling below 5%. The Australian share market fell due to strong performances in AI companies, while major miners faced challenges.