ASX Market Wrap: ASX 200 Jumps 150 Points as Trump Teases US-Iran Deal and SpaceX Files Historic IPO

Key Highlights

• S&P/ASX 200 (^XJO) jumps 1.75% to 8,784.3 points
 • Trump pauses planned Iran strikes, easing global energy fears
 • Brent crude falls below US$90 a barrel after Middle East tensions cool
 • SpaceX files record US$75 billion IPO, lifting global risk appetite
 • Materials and financials lead gains while energy stocks retreat

Australian shares surged on Friday as investors welcomed signs of easing tensions in the Middle East and a landmark SpaceX public offering that reignited enthusiasm across global equity markets.

The S&P/ASX 200 (^XJO) climbed 1.75% to 8,784.3 points by late morning trade, adding more than 150 points and recovering much of the ground lost during this week’s geopolitical turbulence. The broader All Ordinaries rose 1.70% to 8,986.9 points.

Overnight, Wall Street posted strong gains after US President Donald Trump unexpectedly called off planned military strikes against Iran, signalling that negotiations between Washington and Tehran were progressing towards a potential agreement. The shift marked a dramatic reversal from the escalating rhetoric that had rattled markets earlier in the week.

The immediate consequence was felt in energy markets.

Brent crude oil tumbled more than 4% overnight as concerns about supply disruptions through the Strait of Hormuz eased. By Friday morning, Brent was trading around US$89.32 per barrel, well below the levels that had sparked fears of a fresh inflation shock.

Commodities Price Index | Source: MarketIndex 

The easing in oil prices helped lift sentiment across most sectors of the Australian market, particularly among banks, industrials and resource companies.

Global optimism received another boost from one of the most anticipated corporate events in modern market history.

SpaceX, the aerospace and satellite company founded by Elon Musk, priced what is set to become the largest initial public offering ever undertaken. The company plans to raise US$75 billion through the sale of 555.56 million shares priced at US$135 each, giving it a valuation of approximately US$1.77 trillion ahead of its Nasdaq debut.

The float eclipses the previous record set by Saudi Aramco in 2019 and is expected to become one of the largest holdings across major global index funds and pension portfolios.

ABC Chief Business Correspondent Ian Verrender noted that the scale of the listing means millions of Australian superannuation members will likely gain indirect exposure to SpaceX through international equity allocations.

Locally, investors also continued assessing the outlook for interest rates.

The Melbourne Institute of Applied Economic and Social Research expects the Reserve Bank of Australia to leave the cash rate unchanged at 4.35% at its upcoming meeting. Meanwhile, HSBC revised its forecasts, suggesting any future rate cuts may now be delayed until the third quarter of 2027 as policymakers navigate a sluggish but inflation-sensitive economy.

The strongest gains on the ASX came from the materials sector, which rose 3.28%.

A modest recovery in iron ore prices, up 0.2% to US$101.7 per tonne, helped support miners and exploration companies. Meteoric Resources (ASX: MEI) jumped 10.94%, while Develop Global (ASX: DVP) gained 9.25% as appetite returned to growth-oriented resource plays.

Financial stocks also participated in the rally.

The financial sector advanced 1.71%, while the banking sector climbed 1.89% as lower energy prices reduced concerns about inflation pressures and potential economic disruption.

Not every corner of the market joined the celebration.

ASX Sector Snapshot | Source: MarketIndex 

Energy stocks fell 1.66% as the decline in oil prices weighed on earnings expectations. Woodside Energy (ASX: WDS) dropped 2.16% to $30.84, while Viva Energy (ASX: VEA) lost 3.65%.

Education provider IDP Education (ASX: IEL) was among the day’s weaker performers, falling 5.48%, while REA Group (ASX: REA) shed 3.67%.

Beyond the market action, new data pointed to changing investment behaviour among Australians.

Global X ETFs reported record inflows of $2.3 billion into Australian share ETFs during May. The trend appears linked to proposed capital gains tax reforms, with many investors shifting towards income-focused strategies and dividend-paying stocks.

Marc Jocum, Senior Product and Investment Strategist at Global X ETFs, said investors were increasingly focused on after-tax returns.

“Investor behaviour in May points to a clear pivot. The proposed CGT reforms have sharpened the focus on after-tax returns, prompting many Australians to reassess how their portfolios generate performance. The combination of tax changes and market performance is reinforcing the appeal of income strategies.”

Despite Friday’s strong rebound, economists remain cautious about the broader outlook.

Associate Professor Tim Robinson from the Melbourne Institute said economic growth remains subdued.

“Growth in the Australian economy in the March quarter was soft and narrowly based. However, a hold now does not mean that we’re at the end of the tightening phase of interest rates. It’s highly uncertain. If high inflation becomes built into inflation expectations, it can lead to even higher inflation.”

For now, however, markets appear focused on relief rather than risk.

After a week dominated by fears of military escalation and oil supply disruptions, Friday’s session offered a reminder that sentiment can change quickly. Whether the optimism surrounding a potential US-Iran agreement and the blockbuster SpaceX float can sustain momentum into next week remains the key question facing markets.