On Friday, the S&P/ASX 200 Index (ASX: XJO) was sold off and sank notably lower. The benchmark index fell 1.25% to 6,932 points.
Will the market be able to bounce back from this on Tuesday? Here are five things to watch:
ASX 200 expected to crash
The Australian share market looks set to start the week in the worst possible fashion. According to the latest SPI futures, the ASX 200 is poised to open the day a massive 296 points or 4.3% lower. This follows significant weakness on Wall Street on Friday and last night. In respect to the latter, the Dow Jones dropped 2.8%, the S&P 500 fell 3.9%, and the Nasdaq sank 4.7%.
S&P 500 enters bear market
Wall Street's S&P 500 fell into a bear market on Monday night after investors continued to panic over a sky high inflation reading in the United States. This has been driven by fears that the US Federal Reserve will be forced into a larger than expected rate hike later this week. According to the Wall Street Journal, it has suggested that the Fed will consider raising rates by 0.75%. This has sparked fears of a global recession.
Oil prices edge higher
Despite fears of a global recessions, oil prices held up and edged higher overnight. This could be good news for energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO). According to Bloomberg, the WTI crude oil price is up 0.1% to US$120.83 a barrel and the Brent crude oil price has risen 0.1% to US$122.10 a barrel.
Gold price tumbles
Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a difficult day after the gold price tumbled overnight. According to CNBC, the spot gold price is down 2.7% to US$1,824.3 an ounce. The prospect of higher rates weighed heavily on the safe haven asset.
BHP and miners to sink
BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), and other mining shares are expected to sink deep into the red on Tuesday. This follows two consecutive sessions of heavy declines for mining shares on Wall Street. This has seen both BHP and Rio Tinto lose approximately 7% of their value over the sessions, with 4% declines overnight.
