Markets Overview

  • ASX SPI 200 futures up 1.3% to 8,636.00
  • S&P 500 up 1.1% to 7,432.97
  • Dow Average up 1.3% to 50,009.35
  • Aussie up 0.6% to 0.7153 per US$
  • US 10-year yield fell 8.0bps to 4.5855%
  • Australia 3-year bond yield rose 1.5 bps to 4.69%
  • Australia 10-year bond yield rose 0.9 bps to 5.07%
  • Gold spot up 1.4% to $4,543.92
  • Brent futures down 5.3% to $105.38/bbl

Economic Events

  • 09:00: (AU) May S&P Global Australia PMI Compo, prior 50.4
  • 09:00: (AU) May S&P Global Australia PMI Mfg, prior 51.3
  • 09:00: (AU) May S&P Global Australia PMI Servi, prior 50.7
  • 10:30: (AU) Australia to Sell A$1 Billion 77-Day Bills on May 21
  • 10:30: (AU) Australia to Sell A$1 Billion 126-Day Bills on May 21
  • 11:00: (AU) Australia to Sell A$150 Million 2.5% 2030 Linkers on May 2
  • 11:00: (AU) May Consumer Inflation Expectation, prior 5.9%
  • 11:30: (AU) April Employment Change, est. 15,000, prior 17,900
  • 11:30: (AU) April Unemployment Rate, est. 4.3%, prior 4.3%
  • 11:30: (AU) April Participation Rate, est. 66.8%, prior 66.8%
  • 11:30: (AU) April Full Time Employment Change, prior 52,500
  • 11:30: (AU) April Part Time Employment Change, prior -34,600

Australia’s April labor market report likely shows modest job gains and a tick up in the unemployment rate, with early signs of the Iran war’s impact on hiring potentially visible in the data, according to Bloomberg Economics.

Asian equities followed Wall Street higher as optimism over US-Iran talks eased concerns about Middle East tensions, sending crude oil and bond yields lower. Nvidia Corp. shares slipped in a lukewarm response to its sales forecast.

South Korean stocks jumped over 4%, lifting the broader MSCI Asia Pacific Index 1.2%. Samsung Electronics Co. shares rose as much as 7% after reaching a last-minute deal with its labor union to avoid a strike.

A sense of caution crept into markets, with US equity-index futures falling 0.5%. Nvidia shares slipped in extended trading even as revenue from data center operators continued to surge. Technology stocks remained in focus with SpaceX filing for an IPO.

Brent crude oil edged higher to $105.60 a barrel after falling more than 5% in the previous session. That came after President Donald Trump said the US is in the “final stages” with Iran, raising expectations for a near-term restart of energy flows through the critical Strait of Hormuz. Treasuries surged on Wednesday, bouncing back after the recent selloff that was fueled by inflation concerns.

Optimism over a potential deal in the Middle East set the stage for Asian stocks to rebound after four days of losses driven by rising bond yields and concerns that the AI-fueled equity rally had stretched valuations too far. Investors have also been grappling with inflation risks from elevated oil prices, scaling back bets on interest-rate cuts and reviving speculation that borrowing costs could rise further.

“Everyone wants to see this end, but negotiations so far have been far apart on key issues, with both sides expecting each other to blink first,” said veteran strategist Louis Navellier. “Even if a deal is struck, it may take some time to be sure it won’t be violated for things to fully return to normal.”

The S&P 500 Index rose over 1% and the tech-heavy Nasdaq 100 climbed 1.7% on Wednesday. A gauge of chip stocks surged 4.5%.

The firming sentiment helped Treasuries gain across the curve Wednesday, while an index of the dollar edged lower. Traders eased some of their bets on the Federal Reserve raising interest rates by the end of the year. They still anticipate that the central bank’s next move will be a hike, in contrast to the multiple cuts seen before the US attacked Iran in late February.

Iran is reviewing the US’s new draft in response to Tehran’s 14-point proposal and is yet to give a response, Tasnim reported. President Masoud Pezeshkian posted on X that Iran has “explored every avenue to avert war,” adding that “all paths remain open from our side.”

Trump also said that a deal will be made or “we’re going to do some things that are a little bit nasty, but hopefully that won’t happen,” according to a White House pool report.

Despite the equity-market gains on Wednesday, it’s worth noting that it was not the first time optimism took hold even without any visible signs of progress in negotiations between the US and Iran.

“I’d love to believe this, but let’s face it: How many times have we heard this before?” said Win Thin, chief economist at Bank of Nassau 1982, after Trump’s remarks.

Meanwhile, Nvidia’s latest forecast anticipated sales in the three months through July will be about $91 billion, higher than the average analyst estimates of $87 billion, according to data compiled by Bloomberg.

The world’s most valuable company also dialed up its shareholder rewards, increasing its quarterly dividend to 25 cents a share from a penny. And the chipmaker announced $80 billion in stock repurchases.

“Nvidia delivered another beat, but at this point that’s essentially priced in as it keeps beating quarter after quarter,” Emarketer analyst Jacob Bourne said in a note. “The lingering question is whether it can convince investors the AI build-out has durability into 2027 and 2028.”