ASX retreats as banks and materials weigh on sentiment
The Australian share market experienced its steepest one-day drop since May, as investor sentiment soured on the back of persistent US inflation and renewed tariff concerns. The S&P/ASX 200 Index (ASX: XJO) declined by 0.8 per cent to close at 8561.80, retreating from record highs. Market analyst Tony Sycamore from IG Group Holdings plc (LON: IGG)cautioned that a further slip below the 8530–8510 range could trigger a deeper correction toward the 200-day moving average near 8250. Banks led the downturn, with National Australia Bank Limited (ASX: NAB) sliding 3.4 per cent despite internal board support for its CEO. Westpac Banking Corporation (ASX: WBC), Commonwealth Bank of Australia (ASX: CBA), and Australia and New Zealand Banking Group Limited (ASX: ANZ) also posted losses.

Materials and healthcare sectors under pressure
Market sentiment extended into the materials and healthcare sectors. Analysts from Citigroup Inc. (NYSE: C) advised caution on iron ore gains, suggesting speculative Chinese demand rather than strong fundamentals. Despite this, iron ore futures edged higher in Singapore, helping Rio Tinto Limited (ASX: RIO) close 0.2 per cent higher following robust Q2 production data. BHP Group Limited (ASX: BHP) fell 0.7 per cent, while CSL Limited (ASX: CSL) dropped 1.3 per cent amid renewed tariff threats on pharmaceuticals. Among individual movers, Megaport Limited (ASX: MP1) surged 6.3 per cent after a Macquarie upgrade. Iluka Resources Limited (ASX: ILU) added 4.3 per cent, boosted by a bullish outlook and industry developments. On the downside, Newmont Corporation (NYSE: NEM) fell 5.7 per cent after a leadership change and asset sales, while South32 Limited (ASX: S32) and Evolution Mining Limited (ASX: EVN) also posted notable declines.

Global markets remain cautious amid mixed signals
US markets showed caution as traders digested remarks from President Donald Trump and the latest Beige Book report highlighting persistent economic uncertainty. US producer prices were flat in June, while annual wholesale inflation eased to 2.3 per cent – its lowest since September. In corporate news, Tesla Inc. (NASDAQ: TSLA) is set to launch a six-seat version of its Model Y in China to regain competitive edge, and Johnson & Johnson (NYSE: JNJ) beat earnings expectations and raised its guidance despite industry headwinds. Meanwhile, ASML Holding N.V. (NASDAQ: ASML) CEO Christophe Fouquet trimmed sales growth projections for 2026 due to ongoing trade tensions and geopolitical uncertainties.