The ASX is set for a stronger finish to the week, with futures up 61.9 points (+0.72%) at 9:15 am AEST after easing oil prices, falling bond yields and new record highs on Wall Street improved market sentiment overnight.
The positive lead follows a bruising session locally on Thursday, when the ASX 200 slumped 1.43% as renewed military exchanges between the US and Iran triggered a broad sell-off across miners, banks and technology stocks.
Wall Street shrugs off geopolitical volatility
US markets finished higher overnight despite another volatile round of headlines from the Middle East.
The S&P 500 rose 0.58%, while the Nasdaq gained 0.91% and the Dow Jones edged 0.05% higher, all hitting fresh records. Smaller companies also participated, with the Russell 2000 adding 0.57%.
The session initially opened on a weaker footing after reports of further military exchanges between US and Iranian forces. However, sentiment improved after reports emerged that negotiators were working towards a 60-day extension of the ceasefire and a reopening of the Strait of Hormuz.
Technology stocks again provided much of the leadership.
Snowflake surged after raising revenue guidance and announcing a major cloud infrastructure agreement with Amazon Web Services, while enthusiasm around AI spending continued to support software, cloud computing and semiconductor-related names.
The latest results from Dell also reinforced the strength of AI infrastructure investment, with the company reporting record revenue and a sharp lift in AI-related orders after the market close.
Oil and bond markets settle down
The biggest shift overnight came in energy markets.
Oil prices swung sharply throughout the session as traders reacted first to reports of military activity and then to signs of diplomatic progress. By the close, Brent crude had fallen back below US$94 a barrel after briefly approaching US$98 earlier in the day.
The calmer tone also filtered through to bond markets. The US 10-year Treasury yield eased to around 4.45%, extending a decline that has seen yields retreat over the past week.
Lower yields and softer oil prices helped offset concerns from the latest US economic data, which showed first-quarter GDP growth revised lower to 1.6% annualised. Consumer spending remained positive but subdued, while housing activity continued to weaken under the weight of higher borrowing costs.
Commodities and currencies
Most major commodities other than oil recovered overnight after Thursday's sharp swings.
- Copper rose 1.3%, continuing to benefit from strong electrification and AI-related demand themes
- Gold rebounded around 1% as investors returned to the precious metal after the previous session's heavy selling
The broader move was supportive for resource-linked sectors, with copper miners, lithium, uranium and strategic metals ETFs all finishing higher in US trade.
The Australian dollar strengthened modestly to around US71.6 cents, outperforming many major currencies as the US dollar weakened.
ASX coming off a sharp sell-off
Thursday's local decline reflected a rapid reversal in market sentiment after optimism around a possible Iran agreement gave way to concerns about renewed conflict.
Materials was the weakest sector, with gold miners particularly hard hit as investors locked in profits following a strong run. Banks, healthcare and technology stocks also retreated as risk appetite deteriorated across the market.
Consumer staples and discretionary retailers were the only sectors to finish higher, while Dicker Data stood out among individual names after another strong update linked to AI-related demand.
What’s on the radar today
Attention will remain firmly on developments in the Middle East, with markets likely to respond quickly to any confirmation — or breakdown — of the proposed ceasefire extension.
Locally, private sector credit figures are due this morning, while investors will also continue digesting Thursday's surprisingly strong capital expenditure data, which highlighted ongoing investment in information technology and communications infrastructure.
Early small-cap updates are relatively light, with a handful of notable developments:
- Solis Minerals Ltd (TSX-V:SLMN, ASX:SLM, OTCQB:SLMFF, FRA:08WA): The company secured firm commitments for a A$6 million placement to fund upcoming drilling at its Brazil lithium project and Cinto copper project. Existing strategic shareholder PLS Group maintained its 5.1% stake, with drilling at the Brazil assets scheduled to begin next month.
- Tamboran Resources Corporation (NYSE:TBN, ASX:TBN, OTC:TBNRL, FRA:O8R): Tamboran completed its acquisition of Falcon Oil & Gas subsidiaries, giving it what it describes as the largest acreage position in the Beetaloo Basin at around 2.8 million net prospective acres. The company said first gas from its pilot project remains on track for the third quarter of 2026.
After Thursday's sharp sell-off, the combination of record highs on Wall Street, lower bond yields and stabilising commodity prices should provide some support for local shares heading into the weekend.