SYDNEY — Australian shares surged Tuesday morning, with the S&P/ASX 200 climbing 92.6 points, or 1.03%, to 9,111.9 by 11:39 a.m. AEST, putting the benchmark index within striking distance of the all-time high it set earlier this year.
The rally extended gains from Monday’s session, when the index rose 0.5% to close at 9,019.30 points, and builds on what was already the market’s strongest monthly performance in five months during July. Tuesday’s advance was broad-based, tracking a powerful overnight session on Wall Street and a retreat in oil prices that lifted sentiment across nearly every corner of the local market.
Wall Street sets the tone
The move higher followed a strong close in the United States, where the S&P 500 gained 1.48% to finish within 0.1% of its record high, the Nasdaq Composite jumped 2.13% on broad strength across megacap technology and semiconductor stocks, and the Dow Jones Industrial Average rose 1.32% to close at a record level.
Amazon shares climbed more than 4.5%, pushing the company’s market capitalization above $3 trillion for the first time, as investors responded to strong cloud growth. SpaceX also rallied ahead of its first quarterly results since listing, while Apple slipped as some investors continued trimming exposure to the tech giant.
Communication services was the strongest performer among the S&P 500’s 11 major sectors overnight, climbing 4.3% on the back of gains in Meta Platforms and Alphabet. Energy was the lone laggard, falling 1.2% as crude prices tumbled.
Oil slide and Iran diplomacy in focus
Much of the optimism flowing into Tuesday’s session traced back to easing tensions between the United States and Iran. Brent crude slid nearly 8% to $83.76 a barrel after President Donald Trump said he had called off what he described as the biggest planned military action against Iran since World War II. Trump has also said Iran and other Middle Eastern nations had asked for more time to finalize a deal aimed at fully reopening the Strait of Hormuz, one of the world’s most critical oil shipping routes.
Signals on the diplomatic front remained mixed Tuesday, with Trump indicating renewed talks were underway while Iranian officials said none were currently planned. Still, the broader direction — falling oil prices and reduced geopolitical risk premium — has been enough to keep buyers engaged in equity markets across the past several sessions.
Falling oil also weighed on the U.S. dollar, which in turn helped support gold. Bullion futures edged higher to around $4,107.30 an ounce, keeping Australian gold miners in focus. Genesis Minerals and Capricorn Metals were among the local names investors were watching closely as the sector continued to benefit from the combination of a softer dollar and lower energy costs.
Banks, healthcare and miners lead gains
Banking and healthcare stocks led Monday’s advance and appeared to be extending that leadership into Tuesday’s session, according to market commentary, as investors rotated back into sectors that had lagged during earlier bouts of Middle East-driven volatility. Mining stocks also found support from the broader risk-on mood and firmer commodity prices tied to the weaker U.S. dollar.
Energy stocks were something of an exception. While the sector had been a major beneficiary of the Iran conflict earlier this year, the sharp pullback in crude prices has begun to weigh on producers, a dynamic that played out repeatedly through past de-escalation episodes in 2026.
A different story in Asia
The rally in Australian equities stood in contrast to steep losses elsewhere in the region. South Korea’s Kospi index tumbled more than 5% to 6,257.45, dragged lower by the country’s two heavyweight chipmakers, SK Hynix and Samsung Electronics, which fell 8.79% and 8.76% respectively. Japanese equities also gave back gains from the prior week.
The selloff in Korean chip stocks tracked a mixed session for U.S. semiconductor names, with Micron falling more than 5% and AMD and Qualcomm also lower. Even so, Morgan Stanley upgraded Korean equities to “overweight” from “neutral,” setting a Kospi target of roughly 9,000, implying about 36% upside, and pointing to industrials, defense and financials as preferred sectors going forward.
Separately, Goldman Sachs refreshed its August U.S. Conviction List, swapping out four names for six new additions, a move the bank framed as a bet on a broadening equity market rally beyond the small group of megacap technology stocks that have driven much of this year’s gains.
Earnings season looms
Attention in Australia is increasingly turning to the domestic corporate reporting season, which ramps up in the coming weeks. Credit Corp Group was due to release its full-year results Tuesday, with the debt collector guiding toward gross lending of $420 million to $430 million for the 2026 financial year — growth of about 15% at the midpoint — underpinning an expected net profit after tax of $100 million to $110 million, up from $94 million a year earlier.
Other companies expected to report in the near term include AMP, Nick Scali, James Hardie and REA Group, results that investors will scrutinize for signs of how corporate Australia is weathering a stretch marked by geopolitical volatility tied to the five-month conflict involving Iran.
Locally, July factory activity data was revised higher, supported by easing inflation pressures, while in China — Australia’s largest trading partner — policymakers have pledged to maintain monetary support through the second half of 2026, vowing to keep liquidity ample and adjust policy tools as needed.
Outlook
Historically, August has been a modestly positive month for Australian equities, with the index averaging a gain of just under 1% and finishing higher in roughly seven of every ten years since 2001. Analysts caution, however, that reporting season typically brings a pickup in volatility, and this year’s backdrop — an unresolved Iran conflict, a still-cautious Reserve Bank of Australia, and cross-currents from Wall Street and Asia — leaves plenty of room for the index to swing in either direction as the month progresses.
For now, the S&P/ASX 200 remains just below its record closing levels, with Tuesday’s move putting the benchmark firmly back in sight of the highs it touched earlier this year.
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