The ASX is set to extend its rebound on Thursday, with futures up about 43 points (+0.5%) at 9:45 am AEDT, following another strong session on Wall Street as easing oil prices and growing expectations of a de-escalation in the Middle East lifted risk appetite.
The positive lead builds on Wednesday’s sharp 2.24% rally for the S&P/ASX 200, as markets continue to rotate back into growth and cyclical sectors after a volatile March.
Wall Street extends relief rally
US markets pushed higher overnight, with the S&P 500 rising 0.72%, the Dow Jones up 0.48% and the Nasdaq leading gains with a 1.16% climb, building on a sharp rebound in the prior session when all three benchmarks jumped more than 2.5%.
The rally was broad-based, with communication services and industrials both up 1.65%, while technology and consumer discretionary stocks also posted solid gains. Energy stocks were the notable laggard, falling nearly 4% as oil prices pulled back.
Investor sentiment appears to be shifting, with markets increasingly betting the Iran conflict may be nearing a turning point. Comments US President Donald Trump pointing to a potential timeline of “two to three weeks” for an end to hostilities have helped fuel the rebound, even as uncertainty around the Strait of Hormuz remains unresolved.
Oil eases but remains elevated
Crude prices moved lower overnight, with WTI falling 2.5% to around US$98.83 a barrel after recently trading as high as US$119.
While the pullback has provided some relief for equity markets, oil remains well above pre-conflict levels, and supply disruptions through key shipping routes continue to cloud the outlook.
Elsewhere in commodities:
- Gold jumped 1.8% to US$4,758/oz, extending its recent rally
- Copper edged higher, while broader metals were mixed
- Iron ore rose modestly above US$107/t
The shift in commodities reflects a market still balancing safe-haven demand with improving risk sentiment.
Currency markets reflected the improved risk tone, with the Australian dollar rising 0.4% to US$0.6928 as demand for the US dollar eased.
Bond markets were more mixed, with US 10-year yields edging slightly higher to around 4.32%, while volatility continued to decline, with the VIX falling below 25.
ASX rebounds as buyers return
Locally, the S&P/ASX 200 surged 190 points, or 2.24%, to 8,671.8 on Wednesday, marking one of its strongest sessions this year.
The rally was broad, with 10 of 11 sectors finishing higher and strong participation across the market:
- Materials jumped 4.86%, led by gold miners
- Information technology rose 3.48%
- Financials gained 1.79%
- Consumer discretionary and healthcare also posted solid gains
The move was driven by a combination of easing bond yields, stabilising energy prices and renewed optimism that the worst of the recent inflation shock may be passing.
Among standout performers, Eagers Automotive climbed 9.5% on dealership acquisitions, Star Entertainment rose 8.7% after progress at Queen’s Wharf in Brisbane, and Pro Medicus added 6.0% on a buyback announcement.
The strength was also evident in smaller stocks, with the Small Ordinaries up 2.76% and emerging companies gaining more than 3%.
What to watch today
Markets are likely to tread cautiously into the long weekend, with volumes expected to thin and attention turning to key developments later in the day.
- Trump speech (midday AEDT): Markets will be looking for clearer signals on the direction of the Iran conflict
- Australia trade balance (12:30pm): A key read on external demand and commodity exports
- Ongoing geopolitical updates: Any shift in rhetoric or action around the Strait of Hormuz remains market-moving
There is also corporate activity to watch, including Synlait Milk’s NZ$307 million asset divestment to Abbott.
With small cap news flow relatively light so far this morning, a handful of ASX updates are nevertheless worth noting:
- Antipa Minerals Ltd (ASX:AZY) lifted its Minyari project resource to 3.6Moz gold equivalent, including 2.9Moz of gold, with 76% now in the higher-confidence Indicated category — a step forward for its ongoing pre-feasibility work in WA’s Paterson Province.
- Sovereign Metals Ltd (ASX:SVM, OTCQX:SVMLF, AIM:SVML, FRA:SVM) reported strong results from rehabilitation trials at its Kasiya rutile-graphite project in Malawi, including significantly improved crop yields and deeper community engagement, supporting mine closure planning and broader project bankability.
For now, the tone has shifted decisively from panic to cautious optimism — but with oil still elevated and geopolitical risks unresolved, markets remain highly sensitive to the next headline.