Australian shares are poised to open higher, taking a lead from Wall Street gains despite ongoing tensions in the Middle East.
ASX 200 futures were up 38 points, or 0.4%, to 8719 at 6.10am AEST, after US equities advanced overnight as oil prices briefly dipped below US$110 a barrel. The move followed comments from senior Trump administration officials suggesting Iran’s recent actions had not breached the ceasefire threshold.
ASX dips as rate hike bites, but losses trimmed late
The S&P/ASX 200 closed 16.6 points lower yesterday, down 0.19% to 8680.5, after a volatile session shaped by monetary policy and geopolitical risk.
The index fell to a five-week low of 8621.6 early in the day as renewed Middle East strikes pushed Brent crude towards US$113 a barrel, before recovering some ground. Sentiment improved after the Reserve Bank of Australia (RBA) lifted the cash rate to 4.35% in an 8-1 decision, with governor Michele Bullock signalling policy may now be “a bit restrictive”, giving the board scope to pause and assess.
Banks weighed on the market, with Westpac falling 2.3% to $37.63 despite a 3% lift in earnings, amid signs of margin pressure. ANZ dropped 0.9% and NAB lost 0.6%, while Commonwealth Bank edged 0.4% higher.
Materials stocks were also softer, with Northern Star down 1.3%, James Hardie off 2.6% and BHP slipping 0.4%.
In corporate activity, Vault Minerals rose 3.1% after agreeing to merge with Regis Resources in a $10.7 billion deal to create the third-largest ASX-listed gold producer. Regis shares fell 5.9%.
Energy stocks outperformed on stronger oil prices, with Woodside up 1.9%, Viva Energy gaining 1.2% and Ampol rising 0.5%.
Wall Street rallies on tech surge and easing oil concerns
US markets pushed higher, with the S&P 500 rising 0.8% and the Nasdaq gaining 1.03% to fresh record highs, while the Dow Jones added 0.7%.
All 11 S&P sectors finished in positive territory, led by materials and technology. Semiconductor stocks were a standout, with the Philadelphia Semiconductor Index jumping 4.2% and now up more than 50% this year.
Intel surged 13% after reports Apple is exploring using Intel and Samsung to manufacture chips for its devices in the US. Apple shares rose 2.6%.
Advanced Micro Devices climbed 4% ahead of earnings, while Micron gained 11.1% and Sandisk jumped 12%.
Not all results impressed, with Palantir down 6.9% despite lifting revenue guidance, and PayPal falling 7.8% on softer outlook commentary.
US officials maintained that Iran’s actions had not escalated into “major combat operations”, helping stabilise investor sentiment and easing pressure on oil prices.
Europe rebounds on tech strength, mixed earnings
European markets recovered after the prior session’s losses, supported by technology stocks and upbeat earnings.
The FTSEurofirst 300 index rose 0.8%, although the UK’s FTSE 100 fell 1.4%, dragged lower by HSBC, which dropped 6.2% after flagging a US$400 million fraud-related loss.
Technology stocks led gains, rising 2.4%, with chipmakers ASML and ASMI among the strongest performers.
Anheuser-Busch InBev surged 9.3% after beating forecasts, while UniCredit gained 5.9% on record quarterly profit and an upgraded outlook. Rheinmetall added 3.4% despite softer revenue.
Currencies mixed as yields ease
Currency markets were mixed against the US dollar as bond yields edged lower.
The US 10-year Treasury yield fell 2 basis points to 4.43%, while the 2-year yield dropped to 3.94%.
- The euro strengthened to US$1.1692.
- The Japanese yen weakened 0.4% to 157.89 per dollar.
- The Australian dollar rose 0.2% to US71.81 cents after earlier weakness following the RBA decision.
Commodities retreat as oil volatility persists
Oil prices eased after recent volatility tied to Middle East tensions and shipping disruptions in the Strait of Hormuz.
- Brent crude settled down 4% at US$109.87 a barrel after briefly trading above US$110.
- Base metals rebounded on bargain hunting, with copper rising 2.6% and aluminium up 2.2%.
- Gold gained 0.8% to US$4,569 an ounce as investors weighed geopolitical risks and rate expectations, while iron ore edged 0.4% higher to US$108.58 a tonne.
Looking ahead
Locally, earnings are due from Amcor, ASX and Light & Wonder.
In the US, results are expected from ARM, Walt Disney, Uber, DoorDash, Novo Nordisk and Snap.