Wall Street's longest weekly losing run in almost a year points to early pressure on the ASX despite upbeat coronavirus news from Victoria.
Australian index futures skidded 36 points or 0.6 per cent as US stocks hit their lowest level of the month, sealing a third straight weekly loss.
Gold rose for a second straight week. Copper hit a two-year high. Iron ore rebounded. Oil eased at the end of a strong week.
The S&P 500 sank 38 points or 1.12 per cent as the market-leading technology sector continued to sell off. The expiry of various options and futures during a so-called "quadruple witching" session added to volumes and volatility. The index fell to its weakest level of the month and recorded a loss of 0.7 per cent for the week.
The Dow Jones Industrial Average shed 245 points or 0.88 per cent to end modestly lower for a third straight week. The three-week losing run is the longest for the Dow and the S&P 500 since last October.
The Nasdaq gave up 117 points or 1.07 per cent as market heavyweights Apple, Microsoft, Alphabet and Facebook all declined. All four closed more than 10 per cent off their highest level of the month. Apple shares have fallen 22.6 per cent from their peak.
Investors kept a wary eye on developments on Capitol Hill and at the White House. Congress broke for the weekend without narrowing the political divide over the shape of a new coronavirus relief package. The US Commerce Department announced a ban on new downloads of WeChat and TikTok.
The S&P/ASX 200 narrowly avoided a fifth straight weekly last week despite a decline of 0.3 per cent on Friday. The index tallied a meagre five points during a week that continued a recent volatile run and did little to assuage concerns about the medium-term outlook for stocks.
The global picture has been clouded by the looming November US presidential election and by an on-going rotation in the US out of the market leaders into lagging sectors. Friday's action lowered all 11 US sectors. Real estate and utilities fell hardest. Health fared best with a decline of 0.1 per cent. The two sectors that matter most on the ASX - materials and financials - gave up 1.7 and 0.2 per cent, respectively.
Investors looking for bullish signs for a new week may take heart from evidence Victoria is finally getting on top of its coronavirus outbreak. The state reported just 14 new cases on Sunday, the lowest number in three months. The 14-day average fell to 36.2, clearing the way for looser restrictions from September 28.
The week ahead is light on domestic economic data. On a global level, the big potential market-moving event is testimony from Federal Reserve Chair Jerome Powell before the House of Representatives starting on Wednesday night. Treasury Secretary Steven Mnuchin is due to appear on Friday.
BHP and Rio Tinto may provide headwinds this morning. The iron ore majors fell in US trade after rising in Australia and the UK. BHP's US-listed stock dropped 1.41 per cent after its UK-listed stock put on 0.51 per cent. Rio Tinto shed 0.46 per cent in the US after gaining 0.34 per cent in the UK.
The declines came as iron ore rebounded at the end of a losing week. The spot ore price landed in China bounced $3.15 or 2.6 per cent to US$125.20 a dry ton. Ore tallied a loss of 3 per cent for the week.
A weaker US dollar helped gold and copper. Gold for December delivery settled $12.20 or 0.6 per cent ahead at US$1,962.10 an ounce, sealing a gain of 0.7 per cent for the week. Copper hit US$6,850 a tonne, its highest level since June 2018, amid strong momentum for hard commodities as stimulus measures from the Chinese government fuel speculative demand.
Oil's benchmarks finished mixed at the end of a strong week. Brent crude settled 15 cents or 0.4 per cent lower at US$43.15 a barrel. West Texas Intermediate edged up 14 cents or 0.3 per cent to US$41.11. Both measures recorded their best weekly advances since June.
The dollar inched back above 73 US cents this morning, rising 0.15 per cent to 73.01 US cents.