Why the ASX 200 is sinking to a 7-week low today

Market jitters hit our local shares.

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The S&P/ASX 200 Index (ASX: XJO) is under pressure again on Monday, with investors taking risk off the table after another jump in oil prices.

At the time of writing, the ASX 200 is down 1.42% to 8,508 points.

The move has pushed the benchmark index to its lowest level in around 7 weeks.

The ASX 200 is now down 2.7% over the past week and 4.9% over the past month.

So, what has investors selling today?

Sad investor watching the financial stock market crash on his laptop computer.

Image source: Getty Images

Oil keeps the pressure on

Brent crude futures have pushed above US$111 a barrel as investors watch the risk of further escalation in the Middle East.

Reuters reported that oil and bond yields rose as global markets reacted to fresh inflation concerns and ongoing geopolitical tension.

Investors were already nervous after Wall Street ended lower on Friday as concerns over rising prices and higher bond yields weighed on sentiment.

The Dow Jones Industrial Average Index (DJX: .DJI) fell 1.1%, the S&P 500 Index (SP: .INX) lost 1.2%, and the Nasdaq Composite Index (NASDAQ: .IXIC) dropped 1.5% as Treasury yields moved higher.

That has left local investors with little reason to take on more risk today.

Most ASX 200 shares are falling

The weakness is spreading across most of the market.

The S&P/ASX 200 Industrials Index (ASX: XNJ) and the S&P/ASX 200 Materials Index (ASX: XMJ) are among the main drags, down 4.22% and 2.89%, respectively.

On the other hand, the S&P/ASX 200 Energy Index (ASX: XEJ) is one of the few areas finding support from the oil rally, up 1.94%.

A big part of the industrials weakness is coming from Brambles Ltd (ASX: BXB).

The Brambles share price is down 19.23% to $17.85 at the time of writing after the pallet pooling giant cut its FY26 profit guidance.

The downgrade has made Brambles one of the day's biggest ASX 200 fallers, which is not helping an index already under pressure.

Foolish Takeaway

Today's ASX 200 fall is being driven by a mix of global concerns and local weakness.

Higher oil prices are keeping inflation worries alive, while Brambles has given investors another reason to sell after cutting its profit guidance.

The weakness also looks broad, with most sectors in the red and materials stocks weighing heavily on the index.

Investors appear to be showing caution rather than buying the dip, especially with no clear sign yet of where the selling might settle.

With the ASX 200 continuing to drift lower and US futures pointing lower, the market could be set for another difficult start tomorrow.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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