ASX set to fall as US-Iran strikes push oil to two-month high

ASX futures pointed to a 0.9 per cent fall to 8,934 points at 7:30am AEST, following Tuesday's modest 0.1 per cent decline on the ASX 200. The Australian dollar slipped 0.3 per cent to 71.5 US cents.

On Wall Street, the Dow Jones fell 0.8 per cent, the S&P 500 lost 0.7 per cent and the Nasdaq Composite dropped 1 per cent. European indexes also closed lower, with the DAX down 1.1 per cent and the Stoxx 600 losing 0.6 per cent.

Brent crude futures surged 5.2 per cent to $US95.15 a barrel, the highest in two months, as markets priced in heightened geopolitical risk. Spot gold fell 2.7 per cent to $US4,329 an ounce. Bitcoin declined 1.5 per cent to $US77,410.

Separately, a new report from the Powering Skills Organisation (PSO), a government-established jobs and skills commission, warns that the artificial intelligence boom is worsening an already tight labour market. Australia lacks enough workers to build both housing and data centres, the report says, and competition for skilled labour has accelerated. The report was released on Wednesday.

In a column published by the ABC, journalist Gareth Hutchens interviewed US author and journalist Gil Durán, who argues in his book The Nerd Reich: Silicon Valley Fascism and the War on Democracy that many tech billionaires seek to usher in a post-democracy era where they control their own pockets of society.

Why This Matters

The escalation of US-Iran strikes directly impacts Australian investors through falling share prices and higher oil prices, affecting everything from fuel costs to superannuation balances.
The AI boom's competition for skilled workers could further delay housing construction, exacerbating Australia's housing affordability crisis.
The debate over Silicon Valley's influence on democracy raises questions about power concentration and regulation of tech giants.

Background

US-Iran tensions have periodically flared over the past decade, with previous strikes and retaliations causing volatility in oil markets and global equities. The fresh strikes represent the latest escalation. Separately, Australia's construction sector has been grappling with labour shortages since the pandemic, and the rapid expansion of data centres for AI has added new demand for electricians, engineers and project managers.

Key Perspectives

Investors & Markets: Higher oil prices and geopolitical uncertainty typically lead to risk-off moves, reducing equity valuations and increasing bond yields. Homebuilders & Housing Industry: Already struggling with labour shortages, they face even more competition for workers as data centre projects offer higher wages. Critics of Tech Power: Authors like Gil Durán argue that Silicon Valley's libertarian ideology and vast resources threaten democratic institutions and accountability.

What to Watch

Further escalation or de-escalation in US-Iran military actions, which will determine whether oil prices push above $US100.
The Australian government's response to the PSO report, including potential policy changes to increase skilled migration or training.
Any market reaction as the ASX opens and trading unfolds.

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