The ASX is set for a strong open on Thursday, with futures up 91.4 points (+1.04%) at 9:45 am AEST, as easing tensions in the Middle East fuelled a broad global risk rally overnight.
The positive lead follows the ASX 200’s strongest session in nearly a month on Wednesday, when the benchmark jumped 1.3% as investors rotated heavily back into banks and miners after weeks of uneven trade.
Wall Street powers to fresh highs
US markets surged overnight, with the S&P 500 climbing 1.46%, the Dow Jones adding 1.24% and the Nasdaq jumping 2.02% to fresh record highs.
The rally accelerated through the session as reports emerged that the US and Iran are nearing a framework agreement that could ease tensions around the Strait of Hormuz and eventually unwind parts of the current blockade.
Technology stocks again led the charge, with semiconductor and AI-linked names posting outsized gains after another strong earnings season update from AMD.
AMD surged almost 19% after beating expectations and upgrading guidance, helping lift broader chip stocks including Nvidia, Arm and Intel.
The tone was decisively risk-on, with cyclical sectors outperforming while more defensive areas such as utilities and healthcare lagged.
Oil tumbles as peace hopes build
Energy markets saw one of their sharpest reversals since the conflict began.
Brent crude dropped more than 10% before stabilising near US$110 a barrel, while WTI fell below US$103 as traders reacted to signs of progress between Washington and Tehran.
Reports suggest the two sides are discussing a staged reopening of the Strait of Hormuz alongside broader negotiations covering sanctions relief and Iran’s nuclear program.
Even so, the situation remains fluid. President Donald Trump warned overnight that military action would resume if negotiations fail, while Israeli strikes in Lebanon continue to complicate wider regional diplomacy.
Still, for markets, the immediate focus was on easing supply risks — and the prospect that energy prices may have peaked for now.
Commodities and currencies
The sharp pullback in oil triggered a strong rebound across broader commodity markets.
- Gold jumped nearly 3% to around US$4,690/oz
- Copper rallied strongly, pushing back toward record highs
- Lithium and rare earths also rebounded sharply across equity markets
The move reflected improving sentiment around global growth as well as renewed demand following China’s May Day holiday period.
Currency markets also reflected the stronger risk tone. The Australian dollar pushed to a multi-year high before easing slightly to US$0.724 into the close.
Meanwhile, US bond yields moved lower as falling oil prices eased inflation concerns, with the US 10-year yield slipping to around 4.36%.
ASX rebounds as banks and miners surge
Locally, Wednesday’s session marked a major turnaround in sentiment after a difficult stretch for Australian equities.
The ASX 200 climbed 1.3%, with financials and materials accounting for most of the gains as investors piled back into large-cap cyclicals.
The big four banks all rallied strongly, while BHP, Rio Tinto and Fortescue gained between 2% and 3% as iron ore prices strengthened and global growth fears eased.
Lithium stocks also bounced sharply after Chinese futures markets reopened from holidays, with several names posting gains of more than 5%.
In contrast, energy stocks fell as oil prices retreated, while healthcare and technology lagged despite the strong Nasdaq lead overnight.
The divergence highlights a market still highly sensitive to moves in energy prices and global macro sentiment.
What to watch today
Attention is likely to stay firmly on the resources space after another strong night for miners and metals markets globally.
Copper producers, lithium names and rare earth stocks could all see further buying interest after a broad rebound in commodity-linked equities overnight, while the sharp retreat in oil prices may also improve sentiment towards transport and travel-exposed sectors.
Investors will also be watching Australia’s March trade balance data this morning, while US jobless claims and productivity figures are due overnight.
After several weeks dominated by oil shocks and geopolitical escalation, markets are finally seeing signs of relief. Whether that optimism can hold may depend on how quickly diplomacy translates into concrete progress — and whether falling energy prices continue to ease pressure on inflation and growth expectations.