The Australian sharemarket jumped at the open on Wednesday ahead of the nation’s latest inflation figures, following a strong session on Wall Street despite a new surge in oil prices this morning as fresh fighting erupted in the Middle East.

The S&P/ASX 200 was up 110.80 points, or 1.2 per cent, at 9058.60 as of 10.29am AEST. The local bourse added 0.6 per cent on Tuesday after a three-day oil price decline. The Australian dollar was trading at US69.75¢. Inflation data is due out at 11.30am AEST.

Reserve Bank governor Michele Bullock told a charity event in Sydney on Tuesday that while there were signs inflation had not risen as high as feared following the surge in oil prices, it remained too high, putting an interest rate hike on the agenda for the bank’s meeting next month.

Rio Tinto shares jumped 3.7 per cent after the mining heavyweight said first-half profit soared as strong commodity prices outweighed the impact of China’s economic slowdown, US tariff campaigns and conflict in the Middle East. The world’s second-biggest miner reported underlying profit of $US6.85 billion for the half, 43 per cent above last year’s first half, beating analyst estimates of $6.78 billion. Shares of its bigger rival BHP added 0.7 per cent and Fortescue rose 1.5 per cent.

Prices of iron ore — Rio’s biggest earner — remained steady over the six-month period, despite plateauing demand from dominant buyer China. The company is yet to complete negotiations with state-backed buyer China Mineral Resources Group over forward supply agreements.

Rio continues to push its core growth strategy in copper, the metal key for the energy transition, with a ramp-up at its Oyu Tolgoi mine in Mongolia. Copper prices have climbed about 10 per cent this year, driven by supply disruptions and demand boost from data centres.

Oil and gas giant Woodside was up 0.5 per cent after oil rebounded following a three-day decline. West Texas Intermediate rose as much as 5 per cent to top $US83 a barrel, paring some of the 14 per cent drop over the past three sessions. Brent closed near $US84 on Tuesday. The US military said it successfully intercepted an Iranian “attempted surprise attack” on US troops based in the Middle East, according to a post on X.

Most of Wall Street rose overnight, even as stocks of computer chipmakers continued to tumble worldwide. The S&P 500 added 0.2 per cent, but the modest move masked big swings underneath the surface. The Dow Jones Industrial Average jumped 537 points, or 1 per cent, while the Nasdaq composite slipped 0.2 per cent after briefly dropping 9.3 per cent below its record set last month.

On Wall Street, Apple became just the second company ever to achieve a $US5 trillion ($7.2 trillion) market valuation.

The iPhone maker’s shares rose as much as 1.8 per cent to $US342.89 early in the session, pushing the company’s market capitalisation to above $US5 trillion for the first time before falling back below the mark as shares eased before closing at $US340.80. Nvidia closed at a record $US5.7 trillion on May 14, but it has since lost roughly $US1 trillion in valuation. Apple is now the biggest company in the S&P 500 Index.

The majority of the US market rose after more companies delivered stronger profits for the spring than analysts expected. Coca-Cola climbed 5 per cent after its revenue rose 7 per cent despite what CEO Henrique Braun called “a dynamic consumer landscape.”

Stocks of chipmakers and other companies that have been huge winners from the boom in artificial-intelligence technology are coming under increasing pressure.

Micron Technology’s stock came into the day having more than tripled for the year following gangbuster growth, for example. During the three months through May 28, its revenue more than quadrupled from a year earlier.

But worries are rising about whether such growth is sustainable. Big spenders on computer memory could pull back on investments if AI does not produce as much profit or productivity as promised. Lower-cost AI models from China could also mean less demand for memory and computing power than earlier expected.

Micron dropped 8.9 per cent and was the heaviest weight on the S&P 500. Others also helping to keep the market in check were Advanced Micro Devices, down 8.1 per cent, and Applied Materials, down 7.8 per cent.

Several huge spenders on AI chips and data centres are scheduled to report their latest quarterly results this week, which could offer updates on how much they’re planning to invest. Meta Platforms and Microsoft are reporting on Thursday (AEST), while Amazon is due the following day.

Because AI superstar stocks have grown so big, their movements carry more weight on the S&P 500 and other indexes than many other companies. But the broad US market could hold up despite their swings if other, less-loved areas are able to keep rising. It’s a rotation that some strategists have suggested could be healthy for the overall stock market.

A weaker-than-expected reading on confidence among US consumers weighed on yields. Fewer consumers are saying they feel good about current business conditions, according to the latest survey released by the Conference Board.

The recent drop in oil prices helped push traders to trim their bets that the Federal Reserve could announce a hike to interest rates following its latest meeting on Wednesday. They’re forecasting a 31.5 per cent probability, down from more than 36 per cent a day before, according to data from CME Group.

Higher rates could keep a lid on inflation, but they would also slow the economy by making it more expensive for US households and businesses to borrow. Long-term mortgage rates have already hit their highest level in nearly a year, chilling the housing industry.

with AP, Bloomberg

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