Australian shares are poised to recover some ground after Thursday’s bruising session, with ASX 200 futures up 41 points (+0.46%) at 8:30 am AEST. The overnight lead from Wall Street was upbeat, with the S&P 500 and Nasdaq pushing to fresh all-time highs and the small-cap Russell 2000 index joining the party with its first record close since 2021.
The positive global momentum sets the stage for a stronger local open, even as investors continue to weigh central bank signals and shifting commodity markets.
Wall Street rallies on Fed tailwinds
US equities extended gains after the Federal Reserve’s quarter-point cut on Wednesday night, which has reinforced expectations of further easing by October. The S&P 500 rose 0.5% to 6,632, the Dow added 0.3% to 46,142, and the Nasdaq surged 0.9% to 22,471. Small caps stole the spotlight, with the Russell 2000 up 2.5% to a record 2,468, supported by renewed risk appetite in cyclical names.
The tech sector was the standout driver. Nvidia rallied 3.4% after announcing a US$5 billion investment in Intel, helping the latter rocket 23% in its biggest one-day gain since 1987. The Philadelphia semiconductor index climbed to new highs, fuelling broader optimism in growth stocks.
Economic data also offered some relief, with jobless claims seeing their biggest decline in years, easing fears of a rapid labour market downturn. Bond yields ticked higher in response, with the US 10-year at 4.10%, while the dollar strengthened modestly.
ASX recap: Energy slump drags index lower
Closer to home, the S&P/ASX 200 sank 73.3 points (-0.83%) to 8,745.2 on Thursday, slipping below its 50-day moving average as energy names weighed heavily. Santos slumped almost 12% and Woodside shed more than 6%, pulling the sector down 5.9% on the day.
Losses also extended across financials (-0.9%) and industrials (-1.3%), while healthcare and consumer staples posted moderate declines. Materials dipped 0.5% despite firm iron ore pricing, though small caps bucked the trend — the Small Ordinaries rose 0.5%, highlighting stronger sentiment at the lower end of the market.
Technology was a rare bright spot, up 0.2% as local investors followed the positive global lead in growth names.
Commodities and currencies
Gold retreated from record levels, down 0.4% overnight to US$3,644 an ounce, after Wednesday’s sharp rally. Profit-taking and a firmer dollar left bullion consolidating just below its highs. Oil also eased, with Brent slipping 0.6% to US$67.53 a barrel and WTI down 0.7% to US$63.65, as traders shifted focus from geopolitics to economic risks.
Base metals softened, with copper down 0.6% to US$9,080/t and zinc off 0.9%, while iron ore held steady at US$105.24/t amid mixed signals from Chinese steel demand.
The Australian dollar edged lower, trading at US66.1 cents this morning, while Bitcoin pushed above US$117,000 in a renewed crypto rally.
What’s on today
The local calendar is light, with corporate action focused on ex-dividend trades from Latitude Group and Vita Life Sciences. Offshore, the Bank of Japan is due to hand down its policy decision, with markets expecting no change ahead of a potentially more consequential October meeting. UK retail sales figures and Japan’s inflation data will also feed into sentiment later in the session.
Among ASX names, Perseus Mining gained approval for underground development at its Yaouré gold mine in Côte d’Ivoire, while Tabcorp announced it has settled litigation with former CEO Adam Rytenskild, agreeing to a multimillion-dollar payout.
In small caps news, Lightning Minerals Ltd (ASX:L1M) has kicked off a 1,300-metre diamond drilling program targeting high-priority gold and silver zones at its Mt Turner project in Queensland.
More broadly, the recent rally in small caps has been notable, with the Small Ords index climbing to a fresh high and several microcaps attracting investor interest. Brokers remain active, with new Buy ratings on Orica, Pro Medicus and Telix, though UBS downgraded Regis Resources to Sell.