Australian shares are set to rise at the open, with ASX 200 futures up 62 points or 0.73% as of 8:30 am AEST. The positive lead comes after major US indices closed at session highs, buoyed by receding geopolitical concerns and renewed hopes of a near-term interest rate cut by the United States Federal Reserve.
Weakness overcome
US sharemarkets overcame early weakness to close higher on Monday, following limited Iranian retaliation over the weekend.
Iran’s missile strike on a US base in Qatar was viewed as restrained and did not lead to any significant escalation or disruption of key energy infrastructure, calming investor nerves.
At the same time, Federal Reserve Governor Michelle Bowman signalled that a rate cut could be appropriate as early as July if inflation continues to hold or trend lower. Her comments suggested that risks to the labour market may now outweigh inflationary pressures stemming from tariffs.
On Wall Street, the Dow Jones rose 375 points (+0.9%), the S&P 500 gained 1%, and the Nasdaq added 184 points (+0.9%). Tesla shares surged 8.2% after launching its robotaxi service in Austin, Texas. Northern Trust jumped 8% amid reports of merger talks with Bank of New York Mellon, while Super Micro Computer dropped 9.8% after unveiling a US$2 billion convertible bond offering.
European caution
European markets were more cautious, with the FTSEurofirst 300 slipping 0.3% and the UK FTSE 100 down 0.2%, as investors weighed the risk of further unrest in the Middle East.
Germany’s plans to raise defence spending to 3.5% of GDP by 2029, funded through a €400 billion borrowing program, did little to lift sentiment. Aerospace and defence stocks fell 0.7%, while insurance was dragged lower by a 4% fall in Munich RE.
Currencies and commodities
Crude oil prices tumbled more than 7% following the limited Iranian response, with Brent crude falling US$5.53 to US$71.48 a barrel – its sharpest decline since August 2022. West Texas Intermediate (WTI) crude also dropped US$5.33 to US$68.51. The fall reflected easing concerns about supply disruptions through the Strait of Hormuz.
Currency markets saw strength in the Euro, Japanese yen and Australian dollar. The Australian dollar rose from US63.74 cents to US64.55 cents at the US close.
Commodities were mixed. Gold gained 0.3% to US$3,395 an ounce on safe-haven demand, copper rose 0.4% and aluminium climbed 2.3% on concerns about supply disruption from the Middle East. Iron ore futures were little changed, easing by US2 cents to US$94.75 a tonne.
What about small caps?
The S&P/ASX Small Ordinaries dropped a whole 1.00% yesterday to finish at 3,190.80. Over the past five days, the index has lost 2.03%.
There are has been some good news already this morning and you can read about the following and more throughout the day.
- Sovereign Metals Ltd has reported results from the 2025 harvest season of its Conservation Farming Program at the Kasiya Rutile-Graphite Project in Malawi. The program forms part of the company’s ongoing environmental and social initiatives at Kasiya, one of the world’s largest undeveloped natural rutile deposits.
- Nexus Minerals Ltd has completed a 5,172 metre reverse circulation drilling campaign at its Wallbrook Gold Project, located 140 kilometres northeast of Kalgoorlie in Western Australia. The program aims to further delineate near-surface gold mineralisation across the project area.
- Firebird Metals Ltd has appointed battery materials specialist Ken Hoffman as Special Advisor to the Board. Hoffman brings over three decades of experience spanning investment management, energy, and the metals and mining sectors, and is globally recognised for his expertise in battery supply chains.
- European Lithium Ltd Ltd announced that Critical Metals Corp. (Nasdaq: CRML) has entered into a US$2.0 million (A$3.0 million) diamond drilling contract with Greenland-based contractor 60 Degree North Greenland for the Tanbreez Project.
- Constellation Resources Ltd has reported results from maiden Ultrafine+™ soil sampling and recent diamond drilling at the Ularring Gold-Copper Project in Western Australia. A new 1.3 kilometre by 0.45 kilometre gold-copper soil anomaly named “Chatham” has been identified over the Meenar Shear Zone.