ASX 200 futures were up about 50 points (+0.58%) at 9:45 am AEDT on Wednesday, pointing to a slightly firmer open after local equities rebounded on Tuesday. The S&P/ASX 200 rose 1.09% to 8,692.6 in the previous session, recovering part of Monday’s sharp sell-off as commodity prices steadied and investors stepped cautiously back into risk assets.
Small caps also participated in the bounce. The Small Ordinaries climbed 1.31%, while the Emerging Companies index gained nearly 3%, signalling renewed appetite for higher-beta parts of the market after the recent volatility.
Wall Street finishes flat after late fade
US markets were directionless overnight. Major indices opened higher but gradually lost momentum as traders navigated another round of conflicting headlines about the Iran war and the security of the Strait of Hormuz.
The S&P 500 slipped 0.21%, the Dow Jones eased 0.07% and the Nasdaq finished virtually unchanged, up 0.01%.
The session’s turning point came in the energy market. Oil plunged briefly after a post from US Energy Secretary Chris Wright suggested the Navy had escorted a tanker through the Strait of Hormuz — potentially signalling that shipping routes were reopening. The post was then deleted, and crude prices quickly rebounded, leaving traders with little clarity about the true situation in the region.
European and Asian markets were firmer. Germany’s DAX rose 2.39%, the FTSE 100 gained 1.59% and Japan’s Nikkei surged 2.88%, reflecting a stronger response to hopes the conflict might eventually stabilise.
Oil volatility remains the dominant macro driver
Oil remains the market’s biggest source of uncertainty.
West Texas Intermediate crude ended around US$86 a barrel after a dramatic intraday swing that saw prices tumble sharply before recovering part of the move. The pullback follows a steep rally earlier in the week that briefly pushed crude above the US$100 level as traders priced in potential supply disruptions.
For equity markets, the direction of oil continues to shape sentiment. Lower prices ease inflation fears and support risk assets, while renewed spikes could quickly revive concerns about energy-driven price pressures and tighter monetary policy.
ASX rebounds as energy stocks retreat
Tuesday’s rebound on the ASX reflected that dynamic.
Materials, technology and healthcare stocks led the advance as investors rotated back into sectors that had been sold heavily earlier in the week. Information technology rose 1.94%, materials gained 1.87% and healthcare added 1.76%.
Energy stocks moved the other way, falling 2.91% as crude prices retreated from their recent highs.
Among individual movers, Telix Pharmaceuticals jumped nearly 8% after reporting encouraging early-stage Phase 3 data for its prostate cancer treatment TLX591. Fortescue was up 1.1% after finalising its takeover of Alta Copper and securing full ownership of the Cañariaco copper project in Peru.
Commodities and currencies
Commodity markets were mixed but generally supported.
Gold climbed roughly 1% to around US$5,190 an ounce as geopolitical tensions continued to support safe-haven demand. Copper strengthened to about US$5.87 per pound, while iron ore held above US$103 a tonne.
The Australian dollar edged higher to roughly US71.2 cents overnight.
Oil remains the key swing factor, with WTI settling near US$86 a barrel after one of the most volatile trading sessions of the week.
What to watch today
The rare earths sector could draw attention today after Lynas updated its long-term commercial arrangement with Japan Australia Rare Earths through to 2038. The revised agreement includes a new NdPr price floor of US$110 per kilogram for part of its production.
Rio Tinto may also attract interest after securing a US$1.1 billion financing package from international lenders to support development of the Rincon lithium project.
Later tonight, US inflation data will be closely watched. February core CPI is expected to rise 0.3%, and the result could influence expectations for Federal Reserve rate cuts later this year.
For now, the ASX appears set to open higher. But with oil prices swinging sharply on geopolitical headlines, the broader tone of global markets remains fragile.