The ASX is set for a subdued start on Wednesday, with futures down 6 points (-0.07%) at 9:15 am AEST as investors balance another strong night for US technology stocks against renewed instability in the Middle East.
The cautious lead follows a softer local session on Tuesday, when the ASX 200 fell 0.39% as weakness in banks, energy and utilities offset continued strength across miners and copper-linked names.
Wall Street pushes to new highs again
US equities resumed their climb overnight after the Memorial Day break, with the S&P 500 and Nasdaq both finishing at fresh record highs.
Technology and semiconductor stocks again led the gains, driven by another powerful rally in AI-related infrastructure plays.
Micron surged nearly 20% after bullish broker commentary around long-term AI memory demand, helping lift the broader semiconductor sector sharply higher. Qualcomm, Marvell and other chipmakers also rallied strongly as investors continued rotating back into high-growth technology names.
The Nasdaq rose 1.19%, while the S&P 500 added 0.61%. The Dow Jones lagged, slipping 0.23% as healthcare, energy and consumer staples underperformed.
Smaller companies also outperformed, with the Russell 2000 climbing to another record high as falling bond yields improved sentiment toward rate-sensitive parts of the market.
Bond yields ease as oil volatility continues
Bond markets stabilised overnight after several volatile sessions dominated by oil prices and geopolitical uncertainty.
The US 10-year Treasury yield fell back to around 4.49%, extending a recent pullback as traders pared back expectations of further near-term Federal Reserve tightening.
That helped support broader equity markets even as the geopolitical backdrop remained fragile.
Markets continue to monitor developments around the US-Iran negotiations after fresh US strikes reportedly targeted missile launch sites and vessels near the Strait of Hormuz. Iran also claimed it had intercepted a US drone during the latest flare-up.
Despite the renewed military activity, investors appear increasingly focused on the possibility that negotiations could still eventually lead to a broader agreement aimed at reopening shipping routes and easing pressure on global energy flows.
Commodities and currencies
Commodity markets were mixed overnight as traders responded to shifting headlines out of the Middle East alongside improving sentiment towards industrial demand.
- Copper climbed again, with copper miner ETFs surging in US trade
- Gold fell around 1.4% as easing bond yields and improving risk appetite reduced defensive demand
- Oil remained volatile, with Brent crude rebounding towards US$100 a barrel while WTI slipped more than 3%
Uranium, lithium and strategic metals ETFs also posted solid gains overnight, suggesting ongoing support for parts of the local resources sector despite the softer broader market tone.
The Australian dollar eased slightly to around US71.7 cents.
ASX slips as miners outperform again
Locally, Tuesday’s trade again highlighted the uneven nature of the current market environment.
Materials was the only sector to finish higher as investors continued rotating into copper, diversified miners and selected lithium names. South32 jumped almost 5%, while Sandfire Resources, Capstone Copper and Alcoa also posted strong gains amid ongoing enthusiasm around copper demand linked to electrification and AI infrastructure.
Elsewhere, energy stocks weakened despite higher oil prices as the broader geopolitical outlook remained cloudy.
ASX Ltd helped pull financials lower after warning capital expenditure and operating costs would rise sharply in FY27, while utilities also came under pressure. In healthcare, Fisher & Paykel Healthcare surged more than 9% after delivering an in-line result, helping offset weakness in CSL and other defensive healthcare names.
On the radar today
Attention locally will centre on Australia’s monthly CPI indicator, which is due at 11:30 am AEST and could shape expectations around the RBA’s next move on interest rates.
Markets will also continue monitoring developments around US-Iran negotiations, particularly any signs of further disruption near the Strait of Hormuz.
On the corporate front, investors will be digging into results from Nufarm and Web Travel Group, while US earnings from Marvell Technology later tonight could provide another important read on AI infrastructure demand and semiconductor spending trends.