The Australian sharemarket is expected to open marginally higher on Thursday, with futures at 6.09am AEST pointing to a gain of 10 points, or 0.1%, following a positive session on Wall Street and renewed strength across commodity markets.
Local equities are set for a cautious advance as investors assess softer US inflation data, resilient corporate earnings and elevated oil prices linked to continuing tensions in the Strait of Hormuz.
Attention will also turn to BHP Group Ltd (LSE:BHP, ASX:BHP)’s operational review for the 2026 financial year, due to be released at around 8.30am AEST.
Mining stocks drive Wednesday gains
The S&P/ASX 200 closed 32.6 points, or 0.4%, higher at 8,841.1 on Wednesday, with six of the 11 sectors finishing in positive territory.
Materials delivered the strongest performance, climbing 1.7% as iron ore remained above US$100 per tonne and copper prices held firm.
BHP surged 3.2% to A$60.56, recording its biggest single-session gain since mid-June ahead of Thursday’s operational update. The rally helped the miner trim its one-month decline to 6.9%.
Global X ETFs (NYSE:URA) senior investment strategist Justin Lin said BHP benefited from investors viewing the company as a proxy for artificial intelligence infrastructure demand, as well as bargain hunting following the recent resources sell-off.
“Rio Tinto’s revenue beat in its iron ore segment reads positively for BHP as traders position ahead of its earnings result,” Lin said.
“Materials are rebounding from a relatively low base after falling almost 15% between mid-June and early July.”
Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) rose 1.1% to A$165.74 after reporting second-quarter Pilbara iron ore shipments slightly ahead of expectations, although copper production missed forecasts. The company also reduced its copper C1 cost guidance to US30 cents-US50 cents per pound from US65 cents-US75 cents.
Strength in miners offset weakness across much of the broader market as oil prices remained elevated following the resumption of a US blockade on Iranian shipping through the Strait of Hormuz.
Wall Street moves closer to record highs
US stocks advanced after wholesale inflation slowed more sharply than economists had expected, providing further evidence that price pressures may be easing.
The S&P 500 gained 28.81 points, or 0.4%, to 7,572.40, leaving the benchmark within 0.5% of its record high set last month.
The Dow Jones Industrial Average added 150.37 points, or 0.3%, to 52,658.64, while the Nasdaq Composite climbed 162.22 points, or 0.6%, to 26,269.23.
US producer price inflation eased to an annual rate of 5.5% from 6% in May, defying expectations for an acceleration and strengthening the case for the Federal Reserve to remain patient on interest rates.
Bank of New York Mellon rose 5.1% after delivering another strong result from the US banking sector, while workplace supplies provider Cintas gained 4.4% after beating quarterly profit forecasts.
Health insurer Elevance Health fell 8.5% despite reporting stronger-than-expected profit and revenue.
SpaceX shares declined for a fourth consecutive session, closing 0.6% lower at US$135.27 after briefly falling below the US$135 price at which shares were sold during last month’s public offering.
European and Asian markets mixed
European and Asian equities delivered mixed performances as investors continued to navigate volatility in technology and artificial intelligence-related stocks.
South Korea’s Kospi surged 6.2%, rebounding after several sharp declines earlier in the month. The index is heavily influenced by semiconductor giants Samsung Electronics (KRX:005930, LSE:BC94) and SK Hynix, which have been caught in recent swings across AI-linked shares.
In Amsterdam, semiconductor equipment manufacturer ASML reported stronger quarterly revenue growth than previously forecast and issued an upbeat outlook as customers accelerated investment in AI-related capacity.
ASML shares slipped 0.4% in Amsterdam, although its US-listed stock rose 2.2%.
Chinese markets were mixed after data showed the economy expanded at an annualised rate of 4.3% in the latest quarter, down from 5% at the beginning of the year. Hong Kong stocks gained 1.4%, while Shanghai fell 0.3%.
US dollar weakens on softer inflation
The US dollar declined against major currencies after weaker-than-expected producer price data reinforced expectations that the Federal Reserve will maintain a cautious approach to interest rates.
The Australian dollar remained broadly steady between US69.2 cents and US69.7 cents.
The British pound strengthened against both the dollar and euro amid expectations that Labour leadership frontrunner Andy Burnham would appoint a fiscally conservative finance minister.
Central banks are also continuing to gradually diversify their foreign exchange reserves, although the US dollar remains the dominant global reserve currency.
Gold and base metals rebound
Commodity markets broadly strengthened as softer US inflation data pressured the dollar and supported metals prices.
- Gold rebounded to around US$4,061-US$4,063 per ounce, benefiting from lower US bond yields and renewed demand for precious metals.
- Copper advanced to approximately US$6.33 per pound, while iron ore futures remained supported after recently trading near US$110 per tonne amid shipping bottlenecks and continued Chinese demand.
- Oil prices also edged higher, with West Texas Intermediate crude trading between approximately US$79.60 and US$80.30 per barrel.
Crude markets remain volatile as tensions between the United States and Iran and disruption risks around the Strait of Hormuz continue to support prices.