Staff reportersUpdated July 20, 2026 — 10:43am,first published July 20, 2026 — 5:22amThe Australian sharemarket trod water on Monday, with energy stocks following oil prices higher and tech firms losing more ground.The S&P/ASX 200 edged slighter lower over the day to close down 5.4 points, just 0.06 per cent, to 8791.3. Five of 11 sectors stayed in positive territory as energy rallied 1.8 per cent and tech lost 1.55 per cent. The Australian dollar was steady at US69.86¢.Chip stocks and other AI darlings were once again at the centre of shaky trading on Wall Street.APOil prices climbed to their highest point in a month – above $US84 for Brent crude, the international standard – after tensions escalated in the Middle East. The United States launched more airstrikes at Iran in response to the killing of US troops, and Iran fired missiles toward Jordan that risked widening the conflict into neighbouring Israel.Woodside Energy rose 1.44 per cent and Santos added 2.08 per cent. Among fuel refiners, Ampol bounced 1.01 per cent higher and Viva Energy surged 3.85 per cent.Mining giant BHP ended the day unchanged at $57.54. Rival Fortescue closed lower (0.53 per cent) and Rio Tinto also lost ground (1.86 per cent). Conflict in the Middle East is stoking bets the Federal Reserve may need to raise interest rates to contain inflation putting pressure on gold miners such as Northern Star, which lost 1.04 per cent, and Evolution Mining, which slumped 2.09 per cent.Key financial stocks were relatively stable with the Commonwealth Bank and National Australia Bank edging down, while the ANZ Bank and Westpac climbed marginally.Global doubts about technology stocks were echoed on the ASX, where WiseTech slumped 3.55 per cent, Xero lost 2.08 per cent and Technology One dipped 1.48 per cent. A fresh sell-off in artificial intelligence stocks had sent Wall Street lower on Friday as chip stocks and other AI darlings were again at the centre of shaky trading.The S&P500 fell 1 per cent to finish its first losing week in the past three and only its third since the end of March. Just a couple of days earlier, it had climbed within 0.5 per cent of its all-time high. The Dow Jones Industrial Average dropped 406 points, or 0.8 per cent, and the Nasdaq composite sank 1.4 per cent.AI stocks have been under pressure for weeks on worries that their prices shot too high and that voracious demand for computer memory and processors may be unsustainable if AI ended up producing less profit and productivity than promised.Tech stocks were sold off worldwide with news of a powerful Chinese AI model by start-up Moonshot, Kimi K3, shaking markets. Similar to when China’s DeepSeek announced its AI model in early 2025, another low-cost rival to big Western AI models such as ChatGPT and OpenAI could potentially hurt demand for computer chips and other components.Adding to the pressure on Wall Street were drops for several stocks following their latest earnings reports.Netflix sank 7.3 per cent after its revenue for the latest quarter fell just short of analysts’ expectations, even though its profit was bigger than expected. Its forecasts for upcoming revenue and profit in the summer also fell below expectations.Intuitive Surgical, a maker of robotic surgical systems, dropped 14.1 per cent despite topping expectations for the latest quarter. Analysts pointed to worries about slowing procedure growth because of the expiration of enhanced tax credits that helped lower the cost of health insurance for many Affordable Care Act enrollees.Elon Musk’s SpaceX fell 5.4 per cent and touched its lowest level since its stock began trading on the Nasdaq just over a month ago. The owner of the xAI business has been swept up in the swings for AI stocks, and it also had to abort a test flight of its Starship mega-rocket within a second or so from blasting off.Longer-term Treasury yields eased. The yield on the 10-year Treasury fell to 4.55 per cent from 4.57 per cent late on Thursday.A report suggested sentiment among US consumers is improving more than economists expected, while expectations for upcoming inflation eased. That’s important for the Federal Reserve, which is considering hikes to interest rates to keep a lid on inflation.If expectations for inflation remain anchored, it could prevent a vicious cycle in which people make moves in anticipation of higher inflation which only worsen it.From our partners