ASX set to surge as Wall Street rises, oil retreats; Meta tumbles, Apple reports

The US stock market motored to more records as profits keep piling up for Alphabet, Caterpillar and other big businesses. The gains came after the latest whipsaw moves for oil prices, which surged toward their highest levels since the war with Iran began only to quickly regress.

The S&P 500 rallied 1 per cent and topped its prior all-time high to close out its best month in more than five years. The Dow Jones leaped 790 points, or 1.6 per cent, while the Nasdaq composite climbed 0.9 per cent to its own record.

The Australian sharemarket is set to jump, with futures at 6.43am AEST pointing to a rise of 128 points, or 1.5 per cent, at the open. The ASX lost 0.2 per cent on Thursday. The Australian dollar was 1.2 per cent higher to US72.01¢.

Alphabet led the way and rallied 10 per cent after the owner of Google and YouTube reported profit for the latest quarter that almost doubled analysts’ expectations. Investments in artificial intelligence “are lighting up every part of the business,” CEO Sundar Pichai said.

It’s the latest company to deliver fatter profits for the start of 2026 than analysts expected, even with very high oil prices and uncertainty about the economy.

Apple reported after the closing bell, with results that beat Wall Street estimates, with customers showing eagerness to buy a new MacBook model driven by incoming CEO John Ternus, while supply constraints hindered iPhone sales.

Apple said sales and profits were $US111.18 billion and $US2.01 per share for the fiscal second quarter ended March 28, above analyst expectations of $US109.66 billion and $US1.95 per share, according to LSEG. Sales of the iPhone, still the company’s best-selling product nearly 20 years after its introduction, were $US56.99 billion, slightly less than estimates of $US57.21 billion, according to LSEG data, after the biggest revamp of the lineup since the iPhone X in 2017.

Apple shares were down about 1 per cent in after-hours trading.

Wall Street’s strength followed manic swings in the oil market, where prices surged overnight on worries that the Iran war will affect the flow of crude for a long time. Iran has closed the Strait of Hormuz to oil tankers, keeping them pent up in the Persian Gulf and away from customers worldwide, while a US Navy blockade is preventing Iran from selling its own oil.

Traders are always buying and selling contracts for different kinds of oil, going out for many months. The price for a barrel to be delivered in June briefly went above $US126 overnight before pulling back toward $US114.09 at 4.29am AEST. US oil was 1.4 per cent lower to $US105.44.

Brent’s price is still much more expensive than its roughly $US70 level from before the war. But the morning’s easing in prices and the continuing flood of better-than-expected profit reports from US companies helped keep Wall Street at its records.

Caterpillar soared 9.9 per cent, Eli Lilly jumped 9.8 per cent and O’Reilly Automotive leaped 8.4 per cent after all delivered profits for the latest quarter that topped analysts’ expectations. That’s big because stock prices tend to follow the track of corporate profits over the long term.

Still, a better-than-expected result isn’t always enough to boost a stock’s price if it’s already shot much higher.

Meta Platforms tumbled 8.7 per cent even though the company behind Facebook and Instagram made more profit last quarter than expected. Investors focused more on its increased forecast for how much it will spend on data centres and other investments as it builds out its AI capabilities.

Doubts are still high among some investors about whether all the AI spending by Meta and other companies will produce enough profit and productivity to make it worth it.

Microsoft fell 3.9 per cent after likewise raising its forecast for investments and other capital spending. But analysts also said accelerating trends at its Azure business were encouraging.

Amazon rose 0.8 per cent after swinging between gains and losses through the day. It blew past analysts’ expectations for earnings in the latest quarter.

All told, the S&P 500 rose 73.06 points to 7,209.01. The Dow Jones Industrial Average jumped 790.33 to 49,652.14, and the Nasdaq composite climbed 219.07 to 24,892.31.

In the bond market, Treasury yields eased after oil prices gave up their big overnight gains. Reports also suggested the US economy’s growth accelerated by less in the first three months of the year than economists expected, while a measure of inflation worsened in March by about as much as expected.

A separate report said that fewer US workers applied for unemployment benefits last week in an indication of fewer layoffs even though companies are announcing large cuts to workforces.

The yield on the 10-year Treasury eased to 4.38 per cent from 4.42 per cent late Wednesday.

In stock markets abroad, indexes rose in Europe following a weaker finish in Asia.

London’s FTSE 100 jumped 1.6 per cent after the Bank of England kept its main interest rate on hold. That followed similar decisions by the US Federal Reserve on Wednesday and the Bank of Japan on Tuesday to keep their rates unchanged.

Germany’s DAX returned 1.4 per cent, and France’s CAC 40 rose 0.5 per cent after the European Central Bank also held its own interest rates steady.

Hong Kong’s Hang Seng lost 1.3 per cent, while stocks added 0.1 per cent in Shanghai after a report said China’s factory activity slowed slightly in April but remained in expansion territory for the second month.

AP

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