The ASX is set for a muted start on Friday, with futures essentially flat at 9:45 am AEST, as investors pause after a strong global rally and reassess a mix of rising oil prices, bond yields and ongoing geopolitical uncertainty.
The softer lead comes after a mixed local session on Thursday, when the S&P/ASX 200 slipped 0.26% despite another record-setting night on Wall Street, as stronger-than-expected jobs data kept rate hike risks firmly in play.
Wall Street edges to fresh highs as rally cools
US markets pushed higher overnight, with the S&P 500 rising 0.26% and the Nasdaq gaining 0.36% and both closing at record highs, while the Dow Jones added 0.24%.
The gains were modest compared with earlier in the week, following several sessions of 1%+ moves, but the underlying tone remained constructive. The Nasdaq has now notched 12 straight days of gains — its longest streak since 2009 — while the broader S&P 500 continues to grind higher.
Importantly, market participation broadened. The equal-weight S&P 500 outperformed the headline index, suggesting the rally is no longer being driven solely by mega-cap tech.
Sector moves reflected a more balanced rotation, with energy and real estate leading gains, while financials, industrials and healthcare lagged.
Geopolitics still shaping the outlook
Developments in the Middle East continue to sit at the centre of the market narrative.
US President Donald Trump announced a 10-day ceasefire between Israel and Lebanon, which has helped ease some immediate tensions, while discussions are ongoing around extending the broader truce and restarting US–Iran negotiations.
At the same time, the US naval blockade of Iranian ports remains in place, with the Pentagon planning to deploy additional troops to the region. Energy infrastructure and shipping routes remain under pressure, and the path to a longer-term resolution still looks uncertain.
That mix of tentative progress and lingering risk is keeping markets cautious, even as equities continue to push higher.
Commodities and currencies
Commodity markets reflect the tension between improving sentiment and unresolved supply risks.
- Oil rebounded, with WTI rising 3.7% to around US$94.69 a barrel
- Gold was broadly steady near US$4,795/oz
- Copper edged lower, down around 0.5%
The move in oil comes as doubts emerge around how quickly a broader agreement with Iran can be reached, with some estimates suggesting negotiations could take months.
Currency markets were relatively steady. The Australian dollar held around US$0.716, while the US dollar regained some ground after recent weakness.
Bond yields pushed higher, with the US 10-year yield rising to around 4.31%, while volatility continued to ease, with the VIX slipping below 18.
ASX sees rotation despite index dip
Locally, Thursday’s 0.26% decline masked a significant rotation beneath the surface.
Technology stocks surged, with the sector jumping 7.4% in its strongest session in more than a year, as investors leaned back into growth names.
At the same time, financials, materials and energy stocks weakened, reflecting pressure from rising yields, commodity volatility and lingering uncertainty around fuel supply following the Viva Energy refinery disruption.
Among notable movers:
- Ora Banda Mining Ltd (ASX:OBM, OTC:ESGFF) rose around 10% after reporting record quarterly production and strong free cash flow
- Netwealth gained nearly 6% on strong inflows, and AMP climbed 3.6% on improved platform flows
- Gold majors including Newmont and Evolution declined as the sector rotated
The session highlights a market still searching for direction, with strong sector moves offsetting each other at the index level.
What to watch today
With no major domestic economic releases scheduled, attention will remain on offshore developments and sector moves.
- Energy markets: Oil’s rebound and ongoing supply risks remain key for sentiment
- Geopolitical updates: Any progress or setbacks in Middle East negotiations could shift markets quickly
- Sector rotation: Strength in tech versus weakness in cyclicals will be closely watched
There are also a handful of corporate updates to watch, with Alcoa reporting softer quarterly earnings that may weigh on materials sentiment.
Small-cap news flow remains relatively light this morning, with a couple of early updates:
- Orthocell Ltd (ASX:OCC, OTC:ORHHF) has completed its first Remplir nerve repair procedure within the US Department of Defence and Veterans Affairs hospital network, marking an early conversion from approval to clinical use and supporting its broader US commercial rollout.
- Resolution Minerals Ltd (ASX:RML, OTCQB:RLMLF, FRA:NC3) is set to appoint experienced mining executive Brett Lynch as a non-executive director ahead of its planned NASDAQ listing, strengthening its leadership as it pushes ahead with US-based critical minerals development.
After a strong run to record highs in global markets, momentum may be beginning to slow. The next move will likely depend less on broad sentiment and more on how investors navigate the crosscurrents of rates, energy and geopolitics.