Australian shares are set for a strong start to the new week, with ASX 200 futures up 102 points, or 1.18%, at 8:30am AEDT after a sharp relief rally on Wall Street late last week.
The offshore lead marks a decisive shift in tone following Friday’s heavy sell-off locally, with investors stepping back into beaten-down technology stocks and risk appetite improving across commodities, crypto and smaller caps.
Wall Street rebounds, tech leads the charge
US markets finished Friday with their strongest session since May, reversing much of the damage from earlier in the week’s tech-led rout.
The S&P 500 jumped almost 2%, the Nasdaq climbed more than 2%, and the Dow surged 2.5% to close above the 50,000 mark for the first time. Smaller companies also outperformed, with the Russell 2000 rising 3.6%, reinforcing the sense that investors were rotating towards value, equal-weight indices and oversold cyclicals.
Technology stocks were back in favour after weeks of heavy selling. Nvidia and Broadcom both rallied more than 7%, helping to stabilise sentiment across semiconductors and cloud-linked names.
That said, caution around AI spending remains a theme. Amazon shares fell after flagging a sharp lift in capital expenditure tied to AI infrastructure, reviving concerns about execution risk and returns on investment across big tech. Even with Friday’s bounce, the Nasdaq still finished the week down nearly 2%.
Volatility eased meaningfully, with the VIX falling back below 18 after spiking earlier in the week during the height of AI-related anxiety.
Commodities bounce hard after volatile week
Commodity markets also staged a broad rebound after sharp swings earlier in the week.
Gold surged almost 4% to trade just below US$5,000 an ounce, recovering quickly from last week’s sell-off as the US dollar softened and safe-haven demand re-emerged. Silver was even more volatile, jumping close to 10% on the session.
Base metals firmed, with copper rising about 1% on renewed buying interest after prices retreated sharply from recent highs. Oil edged higher, supported by lingering geopolitical uncertainty around US–Iran talks, though broader supply concerns continue to cap gains.
In currency markets, the Australian dollar held above US70¢, supported by stabilising commodity prices and last week’s hawkish tilt from the RBA. Bitcoin also rebounded, lifting back above US$70,000 as risk sentiment improved.
Back home: Relief bounce likely after Friday’s rout
Locally, Friday’s session marked the ASX’s worst day since November, with the benchmark falling just over 2% amid a near-total collapse in market breadth.
Technology stocks bore the brunt of the sell-off, extending losses linked to fears that AI could undermine traditional software pricing power. Resources and uranium names were also hit hard as sharp commodity price swings triggered profit-taking and forced selling.
That backdrop sets the stage for a strong technical rebound on Monday, particularly across materials, energy and tech, following the overnight moves in global markets. Resource stocks look especially well placed to recover after Friday’s broad-based sell-down, though volatility is likely to remain elevated given ongoing margin changes and extended price moves across metals.
On the corporate front, the early reporting calendar remains relatively light. CAR Group delivered a solid first-half result, posting revenue growth of 8% and a 16% lift in net profit, while reaffirming full-year guidance — a steady outcome in a choppy tape. Bravura Solutions also upgraded full-year revenue and earnings guidance, offering a rare bright spot within local tech.
What to watch today
After Friday’s sharp sell-off, attention locally will be on how much of the overnight rebound actually sticks. Resource stocks are likely to lead early trade following the bounce in metals prices, but recent volatility suggests investors may stay nimble rather than chase moves aggressively.
Technology should also find some short-term support after the US relief rally, particularly among names that were sold down hardest last week.
On the corporate front, deal speculation is back in focus after reports that Pepper Money is in advanced discussions around a potential take-private transaction, though any outcome still appears some way off.
After a bruising end to last week, Monday’s session looks set to open on a far firmer footing — though with volatility still elevated, conviction may remain selective rather than broad-based.