ASX Ends Week on a High as Materials Surge; Eyes on U.S. Inflation and Fed Rate Bets

Key Highlights:

• ASX 200 rises 0.20% to 8,568.1, led by a 2.55% rally in Materials
• Gold and rare earth stocks lift as commodity prices hold firm
• CBA remains in spotlight as most expensive bank globally
• U.S. futures edge higher on hopes of a July Fed rate cut
• Volatility remains low with ASX VIX at 10.9
   

Australia’s share market is trading higher late into Friday’s session, with the S&P/ASX 200 up 0.20% at 8,568.1, buoyed by strong gains in the Materials sector. Investor sentiment remains upbeat amid firm commodity prices and growing optimism around potential U.S. interest rate cuts.

The broader All Ordinaries rose 0.25% to 8,795.2, while the Small Ordinaries gained 0.88%, reflecting a broad-based risk-on mood. The All Technology Index also impressed, jumping 1.01% to 4,017.4.

Source: MarketIndex

Materials Lead the Rally, Gold Shines

Mining and resources were firmly in the driver’s seat on Friday, with the ASX 200 Resources Index up 2.41%. Chalice Mining (ASX: CHN) surged 11.55%, Pilbara Minerals (ASX: PLS) climbed 6.65%, and IGO Ltd (ASX: IGO) added 5.61%.

Rare earth player Arafura Rare Earths (ASX: ARU) rose 8.57% and Northern Minerals (ASX: NTU) gained 6.67%, buoyed by increased investor focus on critical minerals amid global supply chain concerns.

Meanwhile, Meteoric Resources (ASX: MEI) jumped 9.09%, capitalising on strength in the gold market, as the ASX All Ordinaries Gold Index rose 1.03%.

Sector Snapshot: Mixed but Material Gains

While six of eleven sectors finished lower, gains in heavyweight Materials (+2.55%), Technology (+0.61%), and Energy (+0.58%) offset the drag from Industrials (-1.20%) and Healthcare (-0.28%).

Financials, particularly banks, struggled, with the ASX 200 Banks Index down 0.60%. Notably, Reece Ltd (ASX: REH) was the worst performer of the day, tumbling 14.57% after its earnings guidance disappointed.

CBA: World’s Most Expensive Bank?

Commonwealth Bank of Australia (ASX: CBA) closed at $190.71 on Thursday, up 24% YTD, and remains the most expensive bank in the world by share price, according to MST Financial’s Brian Johnson.

In an interview with ABC’s The Business, Johnson remarked:

“The more it goes up, if you’re underweight, the more you’ve got to buy… which means the more it goes up.”

Watch interview

This cycle of forced institutional buying continues to support the stock, despite valuation concerns.

Woolworths Exits MyDeal

Retail heavyweight Woolworths (ASX: WOW) announced it will shut down MyDeal from September 30, citing the lack of profitability and high competition in online marketplaces. The closure is expected to cost $90–100 million, with a $45 million impairment charge to be booked in August results.

CEO Amanda Bardwell noted:

“The closure of MyDeal will lead to a meaningful reduction in Woolworths MarketPlus operating losses… offerings integrated into retail brands have superior economics.”

This mirrors Wesfarmers’ earlier decision to shut its Catch platform, suggesting a broader pullback from standalone marketplace plays.

U.S. Outlook: Rate Cut Bets Build

Overnight, Wall Street closed higher with the S&P 500 up 0.80%, the NASDAQ advancing 0.97%, and the Dow Jones climbing 0.94%. Investors remain optimistic that the Federal Reserve could cut rates as early as July, following dovish labor data and political pressure on Jerome Powell’s leadership.

According to Yahoo Finance, market participants are now focused on Friday’s PCE inflation report—the Fed’s preferred gauge.

“Fresh ecodata showing a softening labor market gave investors a new wave of confidence that the Fed could reduce rates imminently.”

VIX Suggests Calm Ahead

Australia’s Volatility Index (ASX VIX) remains low at 10.9, indicating strong investor confidence and subdued volatility expectations for the next 30 days.

Top Gainers & Losers (Mid-Cap and Up)

Commodities and Currency

• Gold: $3,320.52/oz (↓0.24%)
• Brent Crude: $68.06/bbl (↑0.49%)
• Copper: $5.06/lb (↓0.12%)
• AUD/USD: 0.6551 (↑0.07%)
  
   

Final Take

The ASX ended the week on a solid note, boosted by strong resource sector tailwinds and global optimism around easing monetary policy. With commodities holding firm and rate cut expectations growing, investor sentiment remains cautiously optimistic. However, all eyes will now turn to tonight’s U.S. PCE data, which could be the final puzzle piece for a July Fed pivot.