ASX200 Set to Edge Higher as Wall Street Rallies on US-UK Trade Deal News

Highlights 

• ASX 200 (ASX:XJO) to see modest gains following positive US market news. 
• US-UK trade deal fuels optimism for global market recovery. 
• Energy stocks like (ASX:STO) and (ASX:KAR) benefit from rising oil prices. 

The Australian share market is on track to open modestly higher, with ASX 200 (ASX:XJO) futures up by 3 points or 0.03%, following a strong rally in US markets. This positive movement comes on the heels of an announcement by President Donald Trump regarding a significant trade deal between the US and the UK. The deal, marking the first trade agreement for the US since Trump’s "Liberation Day" tariffs, aims to eliminate 25% tariffs on UK steel and aluminum and reduce tariffs on British cars. In return, the UK has agreed to lower its tariffs on US goods from 5.1% to 1.8% and improve market access for US goods, particularly in pharmaceuticals and machinery. 

The deal sparked optimism across Wall Street, with the S&P 500 rising 0.6%, the Dow Jones gaining 0.6%, and the Nasdaq climbing 1.1%. These positive moves were driven by easing trade tensions and broader concerns about global protectionism, which had previously weighed on markets. 

Commodity Pricing Drives ASX Movements 

On the ASX, commodity pricing continues to play a significant role in market movements. Energy stocks such as (ASX:STO) Santos Ltd and (ASX:KAR) Karoon Energy Ltd are poised to benefit from a surge in oil prices, which rose sharply overnight on the back of renewed optimism regarding US-China trade negotiations. WTI crude oil jumped 3.7% to US$60.22 per barrel, while Brent crude oil climbed 3.3% to US$63.15 per barrel. This uptick in oil prices provides a boost to energy sector shares, with (ASX:STO) and (ASX:KAR) positioned to capitalize. 

Meanwhile, gold stocks like (ASX:EVN) Evolution Mining Ltd and (ASX:NST) Northern Star Resources faced downward pressure as the gold price dipped following the US-UK trade deal announcement. Gold futures dropped 2.5%, trading near US$3,306 an ounce, while spot gold mirrored this decline. 

Financial Sector Faces Challenges 

On the other hand, financial stocks faced some headwinds. Despite reporting record revenue, (ASX:ANZ) ANZ shares fell by 1.93%, primarily due to concerns over its shrinking net interest margin. Similarly, (ASX:WBC) Westpac shares dropped by 4.1% after going ex-dividend, although (ASX:NAB) National Australia Bank rose 1.4% following the release of its first-half results. 

The broader ASX 200 (S&P/ASX200) index managed to show some positive movement, with the All Ordinaries rising by 0.26%. Investors continue to focus on key data releases, including Chinese inflation and trade data, which could provide more clarity on the strength of global demand, particularly for Australian commodities. 

Looking Ahead: Economic Data and Earnings 

Investors will closely monitor upcoming economic data, particularly from China, which will shed light on inflation and trade figures. These are vital for Australian commodity exports, offering potential support for the mining and energy sectors. 

In addition, (ASX:MQG) Macquarie Group Ltd is set to release its full-year results for the fiscal year 2025. Analysts are expecting a flat result, with underperformance in its Commodities and Global Markets and Macquarie Capital businesses. 

For those interested in solid returns, particularly in dividend stocks, exploring ASX dividend stocks could be a key consideration as market conditions evolve. Investors will also keep an eye on the S&P/ASX200 for broader market trends and updates.