There was major turbulence in the market last week, with energy stocks tanking 7.45% and the benchmark S&P/ASX 200 Index (ASX: XJO) closing at a six-month low on Friday.
The ASX 200 lost 2.74%, the benchmark's second-largest weekly fall of 2025.
The ASX 200 also fell below 8,000 points, which one analyst described as a psychological threshold for market sentiment that may trigger a larger sell-off from here.
The index finished at 7,948.2 points on Friday, which was the worst day for the market.
No fewer than 16 ASX 200 shares tumbled to multi-year lows on Friday.
These included ASX 200 oil giants Woodside Energy Group Ltd (ASX: WDS), Santos Ltd (ASX: STO), Ampol Ltd (ASX: ALD), and Viva Energy Group Ltd (ASX: VEA).
Ten of the 11 market sectors finished the week in the red, with energy the biggest faller.
Image source: Getty Images
What spooked the market last week?
The week started well, with the ASX 200 rising 0.9% on Monday. The following day, the trend turned, with the ASX 200 closing lower every day from Tuesday to Friday.
Friday was the worst day, with a 1.81% fall recorded after US President Donald Trump paused tariffs on some Canadian and Mexican goods.
The change came less than three days after the tariffs were introduced.
The about-face was problematic because nothing troubles share markets more than uncertainty. Trump's trademark unpredictability keeps everyone guessing.
On Tuesday, the US started a 25% tariff on imports from Canada and Mexico and an additional 10% tariff on Chinese imports.
All three countries said they would retaliate with tariffs on imported US goods.
With a global trade war appearing imminent, many economists say tariffs will eventually trickle through to consumer prices.
This could reignite inflation just when many advanced economies seem to have it under control. And resurgent global inflation would put an end to interest rate cuts worldwide.
Other factors made it a particularly bad week for ASX 200 energy shares.
Energy shares crumble amid market turmoil
Aside from the potential for a global trade war, which may negatively impact economic growth and, thus, reduce oil demand worldwide, energy shares faced additional pressures last week.
Oil prices fell after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) unexpectedly announced an increase in oil production from April.
Oil prices were also hit when new US jobs, spending, and manufacturing data indicated slower growth in the world's biggest economy.
Later in the week, China, the world's biggest importer of crude oil, announced that its economic growth target for 2025 would be 5% – the same as last year.
More importantly, China also announced a fiscal deficit target of 9.9% of China's GDP.
That's the highest deficit level in more than three decades and implies that to achieve 5% growth, the Chinese government will have to introduce significantly more stimulus.
On top of all that, markets are wondering if Trump's seemingly friendly stance on Russia may mean that sanctions on Russian oil exports could be lifted, thereby adding to global supply.
Last week, Woodside Energy Group Ltd (ASX: WDS) shares fell 9.71% to close at $22.49 per share on Friday.
The Santos Ltd (ASX: STO) share price dropped 7.81% to $6.02.
Ampol Ltd (ASX: ALD) shares fell 7.07% to $24.43.
Viva Energy Group Ltd (ASX: VEA) shares lost 6.36%, closing at $1.62.
ASX 200 uranium shares also had a poor week.
The Paladin Energy Limited (ASX: PDN) share price fell 6.24% to $6.46.
Boss Energy Ltd (ASX: BOE) shares dropped 9.98% to $2.30 per share.
ASX 200 market sector snapshot
Here's how the 11 market sectors stacked up last week, according to CommSec data.
Over the five trading days:
| S&P/ASX 200 market sector | Change last week |
| Materials (ASX: XMJ) | 0.17% |
| Healthcare (ASX: XHJ) | (0.8%) |
| Communication (ASX: XTJ) | (0.93%) |
| Industrials (ASX: XNJ) | (1.79%) |
| Information Technology (ASX: XIJ) | (1.93%) |
| A-REIT (ASX: XPJ) | (2.07%) |
| Consumer Discretionary (ASX: XDJ) | (3.33%) |
| Consumer Staples (ASX: XSJ) | (4.2%) |
| Utilities (ASX: XUJ) | (4.5%) |
| Financials (ASX: XFJ) | (4.61%) |
| Energy (ASX: XEJ) | (7.45%) |
What's next for the ASX 200?
The ASX 200 falling below 8,000 points is a "very negative signal", according to Michael McCarthy, CEO at broker Moomoo.
McCarthy said 8,000 points was a psychological threshold for investors, and last week's tumble may have a deeper impact on sentiment.
McCarthy told the Australian Financial Review (AFR) on Friday: "Close below the [8,000] line and from a technical point of view, that will be a very negative signal."
Speaking of negative signals, the Nasdaq Composite Index (NASDAQ: .IXIC) officially entered market correction territory during Thursday's session in the US.
A correction is defined as a major index falling by 10% or more from its most recent high.
On Friday morning Australian time, the Nasdaq Composite Index (NASDAQ: IXIC) closed at 18,069.26 points, 10.43% lower than its 16 December peak.
The ASX 200 is not in a correction but has lost 7.1% since its most recent closing high of 8,555.8 points on 14 February.
Earlier this year, Dr Shane Oliver, Chief Economist at AMP Ltd (ASX: AMP), tipped a volatile ride for the ASX 200 this year with a "highly likely" 15% correction along the way.
