US sharemarkets rebounded overnight as investors looked beyond the latest developments in the Iran conflict, focusing instead on stronger-than-expected corporate earnings and a recovery in semiconductor stocks.
The Dow Jones Industrial Average rose 385.38 points, or 0.74%, to 52,224.64. The S&P 500 gained 0.89% to 7,509.20, while the Nasdaq Composite advanced 1.29% to 25,837.21. All three major indices snapped three-session losing streaks.
Technology stocks led the recovery, with the VanEck Semiconductor ETF climbing more than 4%. Micron Technology surged 12%, Intel rose 8% and Marvell Technology gained more than 6%, as investors viewed the recent weakness in AI-related stocks as a correction rather than a change in the sector’s long-term outlook.
Earnings also supported sentiment. Industrial giant 3M jumped more than 7% after beating second-quarter expectations, while General Motors gained almost 5% following stronger-than-expected results. With around 66 S&P 500 companies having reported so far, almost 88% have exceeded profit forecasts, according to FactSet. Attention now turns to results from Alphabet, Tesla and IBM later this week.
Oil prices remained elevated as fighting between the US and Iran continued, although reports of a proposed 10-day ceasefire helped ease concerns about a broader escalation. Brent crude settled around US$91 a barrel, while West Texas Intermediate crude finished near US$85.
Australian Market Outlook
Australian shares are expected to open higher after Wall Street recovered on the back of a broad technology rally and another strong round of earnings.
S&P/ASX 200 futures are up 21 points, or 0.2%, to 8,763.
Despite the stronger lead from US equities, elevated oil prices and ongoing developments in the Middle East are likely to keep energy markets and inflation expectations in focus. Locally, investors will watch the Westpac Leading Index, while overseas attention turns to Japan’s June trade data and UK inflation figures for further clues on the global economic outlook.
