Outlook for the day: The ASX 200 could hit new heights after trade deal optimism powered US stocks deeper into record territory.
ASX futures: up 23 points or 0.26%
Overnight themes:
The S&P 500 and Nasdaq posted record closes after the White House announced a trade deal with Japan and signalled a deal with the European Union was near.
The S&P 500 rallied 0.78% to its 12th record close of 2025. The Nasdaq Composite climbed 0.61%, finishing above 21,000 for the first time. The Dow missed a record close by four points with a rise of 509 points or 1.14%.
Stocks took wing after President Donald Trump announced US negotiators had reached a trade deal with Japan that included a 15% tariff on Japanese imports and a US$550 billion investment by Japan in the US. Market sentiment got another shot in the arm from reports from the Financial Times and Bloomberg confirming the EU and US were close to signing off on a similar deal including a 15% tariff on EU imports to the US. The reports come as the clock ticks down towards the White House's self-imposed August 1 deadline for trade agreements.
"The key thing is the markets have confidence that the White House is going to continue to work through these trade deals," Larry Tentarelli, chief technical strategist for Blue Chip Daily Trend Report, told Reuters.
Wall Street's "fear gauge", the VIX or volatility index, declined more than 6% to its lowest in six months.
Utilities and consumer staples were the only sector drags during a "risk-on" session. A 2.25% rally in Nvidia helped lift tech 0.74%. The health, industrial and energy sectors all gained at least 1.5%.
Google-owner Alphabet and Tesla reported earnings after the end of regular trade this morning. Alphabet's shares were lately up 2.65% in extended trade after beating Q2 revenue and earnings expectations and raising its spending forecast to meet "strong and growing demand" for its cloud services. Tesla dipped 0.15% after reporting a second straight dip in quarterly revenue.
The Australian dollar climbed to its highest in eight months as the Japan-US trade deal boosted "risk-on" sentiment and following a strong rally this week in commodity prices. The Aussie was lately trading 0.75% ahead at 66.02 US cents after cracking the 66c level for the first time since November. The minutes from this month's Reserve Bank policy meeting showed the central bank was in no rush to lower benchmark rates.
Gold retreated from a five-week high as the US-Japan trade deal and reports of a pending US deal with the European Union undercut demand for havens. Spot gold was lately off US$42.81 or 1.25% at US$3,388.51 an ounce. US gold futures settled US$46.10 or 1.3% lower at US$3,397.60. "So we're seeing a trade deal with Japan and looking at one with the EU. Ultimately, it means no major retaliatory tariffs from the EU, which has supported risk appetite... equity markets are doing pretty well," Bart Melek, head of commodity strategies at TD Securities, told Reuters.
Iron ore declined as soft Chinese housing market news threw a spanner in a bull run that lifted prices to five-month highs on Tuesday. New home prices in China suffered their biggest fall in June in eight months as a property slump continued. Outstanding property loans grew to the highest in two years. Benchmark iron ore on the Dalian Commodity Exchange settled 0.61% lower at US$113.41 per metric ton, ending a run of five straight gains. The Singapore ore benchmark eased 0.61% to US$104.07.
Copper futures hit a record in the US while London copper edged to its highest in more than two weeks. Comex copper futures surged as high as US$5.93 a pound ahead of the August 1 introduction of a 50% tariff on copper imports into the US, before paring their raise to 1.87% at US$5.8285. Benchmark copper on the London Metal Exchange firmed 0.08% to US$9,927.50 per metric ton. The premium between the two contracts widened overnight to a record US$3,100 a ton as US traders continued to stock up ahead of the tariff introduction. Nitesh Shah, commodity strategist at WisdomTree, warned the US rally may stall after August 1: "We could see... copper range-trading once the tariffs come into play or possibly even soften," Shah told Reuters. "The U.S. will be using up all that stockpile of copper before importing new units from abroad and therefore demand may look a little bit weak for that period of inventory rundown."
Key events today:
Flash manufacturing and services PMIs - 9 am AEST
Speech by RBA Governor Bullock - 1.05 pm
US earnings season: US earnings season: Newmont, Intel, Dow - tonight
US flash manufacturing and services PMIs - tonight
US unemployment claims - tonight
S&P 500: up 508 points or 1.14%
Dow: up 49 points or 0.78%
Nasdaq: up 127 points or 0.61%
VIX: down 6.18% to 15.48
US 10-year treasury yield: up 3.8 points to 4.388%
Dollar: up 0.75% to 66.02 US cents
Iron ore (Dalian): down 0.61% to US$113.41
Brent crude: down 8 US cents or 0.12% to US$68.51
Gold (futures): down US$46.10 or 1.3% to US$3,397.60
Gold (spot): down US$42.81 or 1.25% to US$3,388.51
Silver (spot): down 6 US cents or 0.15% to US$39.24
Palladium (spot): up US$24.50 or 1.86% to US$1,340.50
Antimony (China ore): up 0.02% to US$19,824
NYSE Arca Gold Bugs: down 1.24%
Bitcoin: down 1.62% to US$117,687
Copper (LME): up 0.08% to US$9,927.50
Nickel (LME): up 0.29% to US$15,575
Lithium carbonate (China spot battery grade): up 1.97% to 8,675 yuan
Global X Lithium & Battery Tech ETF: down 1%
Uranium (spot): up 0.25% to US$72
Global X Uranium ETF(URA): up 2.46%
BHP: up 0.45% (US); up 0.35% (UK)
