The morning catch up: ASX to extend gains as global optimism lifts markets

Australian shares are poised to open higher this morning, building on Tuesday’s gains as global sentiment brightens. The ASX 200 was up 18 points or 0.21% at 8:30 am AEST, buoyed by Wall Street’s sharp rally and soft US inflation figures that have improved rate expectations.

While investors await Australia’s Wage Price Index print later today, upbeat offshore cues are expected to drive early local momentum. Analysts expect a 0.8% quarterly rise in wages – a figure modest enough to keep the Reserve Bank of Australia cautious but still worth watching ahead of its May 20 meeting.

Wall Street recoups losses

Overnight, the S&P 500 effectively wiped out its year-to-date losses, climbing 0.72% to be marginally positive for the year at 5,887 and recovering from a 17% drawdown in April. The surge was largely driven by major tech stocks, with big moves by chipmakers Nvidia and AMD on news of a semiconductor supply deal with Saudi Arabia. The index is now within 4% of its record close from February 19.

The Nasdaq Composite surged 1.61% to 19,010, driven by gains in technology and AI-related stocks, although the Dow Jones Industrial Average fell 0.64%, weighed down by a significant drop in UnitedHealth Group shares.

Contributing to the rally was a softer-than-expected April inflation print, with core CPI rising just 0.2%, easing concerns about persistent inflation. The 90-day tariff reduction agreement between the US and China announced Monday also continued to boost investor sentiment.

Markets continued to pivot to growth stocks from defensives such as health care, real estate and staples, which all finished lower.

In addition, Goldman Sachs upgraded its price target for the S&P 500 to 5,900 and lowered its expectations of a US recession following the tariff agreement with China. Meanwhile, Chinese stocks fell on concerns the deal will scuttle expected new fiscal stimulus measures.

ASX in focus

On the local front, Commonwealth Bank reported a relatively in-line result for the third quarter of 2025, while Aristocrat Leisure missed first-half profit estimates. BGH Capital made an unsolicited indication of interest to acquire a controlling interest in Webjet, and Bain Capital blamed macro uncertainty in calling off its bid for Insignia.

Investors are also watching to see if an aggressive sell-off of Woolworths and Coles continues from yesterday on the pivot from defensives. In other ASX corporate actions today, Red Hill Minerals, Washington H Soul Pattinson are paying dividends.

The S&P/ASX Small Ordinaries continued gains from yesterday, up 0.28% to 3,185.

In small caps news today:

1. Anteris Technologies Global Corp announced first-quarter results updating progress on its flagship DurAVR Transcatheter Heart Valve trial and highlighting a $78 million cash position, as well as its inclusion in the FTSE Russell 2000 Index.
2. Patronus Resources Ltd reported encouraging new drilling results from its Cardinia Gold Project in Western Australia’s Leonora region, confirming down-plunge continuation of the high-grade Koi lode, supporting a substantial exploration target and reinforcing outstanding depth potential.
3. Lindian Resources Ltd reported continued strong momentum for project finance at its Kangankunde Rare Earths Project in Malawi, with project execution milestones including ahead-of-schedule preconstruction works and an optimised feasibility study nearing completion.
4. Leeuwin Metals Ltd announced strong assay results from its maiden 2,000-metre RC drilling program at Marda Central in its Marda Gold Project in WA, with wide, high-grade intersections confirming the potential for significant mineralised extensions.

Commodities and currency

Commodity prices saw notable movements overnight, with a 2.5% jump in oil prices driving the S&P 500 Energy Index up 1.3%. WTI crude oil rose 2.78% to US$63.67 a barrel, while Brent crude increased 2.6% to US$66.55 per barrel.

Gold futures edged higher, gaining 0.6% to US$3,247.80 per ounce, supported by the soft inflation reading from the US and a rebound from Tuesday’s sharp loss. Copper prices climbed, with futures up 2.2%.

The Australian dollar strengthened against the US dollar, rising 1.5% to 0.6473, reflecting improved risk appetite and higher commodity prices.