The ASX is set to open higher on Wednesday, with futures up 38 points, or 0.4%, to 8,789, following another positive session on Wall Street as investors continued to back technology and AI-linked stocks despite ongoing geopolitical uncertainty in the Middle East.
Australia's March quarter GDP data is due later today and is expected to be closely watched for clues on the domestic growth outlook.
The S&P/ASX 200 slipped 5 points, or 0.1%, to 8,724.4 on Tuesday after recovering from steeper intraday losses of more than 1.2%.
Investor sentiment was weighed down by mixed signals surrounding diplomatic efforts to end the conflict involving Iran and concerns over rising labour costs after the Fair Work Commission approved a 4.75% increase to minimum and award wages.
Retailers and shopping centre operators bore the brunt of the selling, with JB Hi-Fi falling 5.4%, Domino's Pizza Enterprises down 5.9%, Vicinity Centres losing 4% and Scentre Group declining 2.4%.
The major banks also finished weaker, led by ANZ, which fell 3%, while Westpac lost 1.6%.
Mining stocks helped offset broader market weakness as copper prices continued to rally. BHP gained 1.4% to a record close of $63.37, while Rio Tinto added 1.5%.
Technology stocks were among the strongest performers, with Xero up 7.5%, WiseTech Global rising 7.9% and Life360 surging 13.3%.
Among individual movers, Northern Star Resources jumped 13.6% after signalling openness to takeover approaches and agreeing with activist investor Elliott Management that shareholder returns needed improvement. Infrastructure services company SRG Global rallied 16.6% after securing $1.85 billion in new contracts and upgrading earnings guidance. DroneShield rose 3.6% after securing a $24.9 million US defence contract.
US markets reach fresh highs as AI enthusiasm drives gains
US stocks finished mostly higher overnight, with the S&P 500 and Dow Jones Industrial Average both reaching fresh record highs as investor appetite for AI-related opportunities outweighed geopolitical concerns.
The Dow Jones gained 0.5%, the S&P 500 rose 0.1% and the Nasdaq finished little changed.
The S&P 500 has now advanced for nine consecutive sessions, marking its longest winning streak since May last year.
Technology and semiconductor stocks continued to attract buying interest. Marvell Technology soared 33% after Nvidia chief executive Jensen Huang described the company as a potential "trillion-dollar company" during the Computex conference in Taipei. Hewlett Packard Enterprise gained 7% after bringing forward its long-term financial targets by two years.
AI investment themes remained in focus after Alphabet revealed plans to raise US$80 billion to fund expanded artificial intelligence infrastructure.
Utilities led sector gains while communication services lagged. Cryptocurrency-linked stocks weakened after Bitcoin fell below US$68,000, with Coinbase losing 4.7% and Strategy declining 9.2%.
European shares rise as AI demand boosts semiconductor stocks
European markets closed higher on Tuesday, supported by strong gains in semiconductor and technology stocks linked to artificial intelligence demand.
The pan-European FTSEurofirst 300 index rose 0.7%, while the UK's FTSE 100 added 0.3%.
STMicroelectronics surged 15.1% after raising revenue targets for its data centre business. Other AI-related companies also performed strongly, with Infineon advancing 9.5% and Schneider Electric gaining 4%.
Investors also assessed eurozone inflation data, which showed annual inflation accelerated to 3.2% in May from 3% in April, driven by higher energy and services prices.
Currencies mixed as Aussie dollar strengthens
Currency markets were mixed against the US dollar.
- The euro was steady at US$1.1629.
- The Japanese yen weakened 0.2% to ¥159.92 per US dollar.
- The Australian dollar strengthened 0.3% to US71.78 cents.
Commodities advance on supply concerns and geopolitical risks
Oil prices climbed to one-week highs as markets monitored developments in negotiations aimed at ending the Iran conflict.
- Brent crude rose 1.1% to settle at US$96 a barrel.
Base metals also moved higher amid ongoing supply concerns.
- Copper gained 1.9% to reach a two-week high, while aluminium advanced 1.8%.
- Gold rose 0.3% to US$4,520 an ounce as investors balanced Middle East developments against upcoming US economic data and its potential implications for interest rates.
- Iron ore was little changed, edging 0.1% higher to US$105.13 a tonne.
Looking ahead
Investors will focus on Australian March quarter GDP data today, with Commonwealth Bank economists expecting flat quarterly growth and annual GDP growth to slow to 2.1%.
In the US, markets will monitor ADP private sector employment data and the ISM services PMI, while AI chipmaker Broadcom is scheduled to report earnings.