SYDNEY, July 31, 2026, 07:54 AEST — Australia’s cash market enters the pre-open, with continuous trading due to start at about 09:59:45 AEST.
- September SPI futures settled up 77 points, or 0.86%, at 9,012.5. The ASX 200 ended Thursday 0.78% lower at 8,967.7.
- The index rose 2.15% throughout July. Mechanical estimate: maintaining a 0.86% cash gain through Friday’s close would increase the monthly return to approximately 3.03%.
- At 11:30 AEST, data on Australian producer prices and private credit is due. The Reserve Bank of Australia’s cash rate stays at 4.35%.
Australian shares looked poised to bounce back at the open on Friday, following Wall Street’s surge driven by AI. Futures indicated a reversal of Thursday’s widespread local losses.
Friday marks the last trading session of July. The ASX 200 ended June at 8,778.7 and climbed to 8,967.7 by Thursday. If a 0.86% increase holds through the close, the index would approach 9,045. This is a calculation, not a projection of the market.
Breadth remains a concern. Australian tech shares gained 0.91% on Thursday, but materials dropped 1.59%. Financials slipped 0.37%. Only 53 ASX 300 stocks rose, while 231 declined. A surge led solely by tech at the open could face difficulty sustaining momentum.
| Pre-open measure | Latest level | Change or context |
|---|---|---|
| S&P/ASX 200 cash | 8,967.7 | down 0.78% on Thursday |
| All Ordinaries | 9,122.7 | dropped 0.84% Thursday |
| September SPI futures | 9,012.5 | rose 0.86% overnight |
| AUD/USD, RBA 4 p.m. fix | 0.6951 | July 30 |
| Cash-market status | Pre-open | Scheduled to open around 09:59:45 AEST |
Wall Street provided an optimistic backdrop. Microsoft NASDAQ:MSFT jumped over 15% following its outlook for higher sales and growth in cloud services. The company increased its market value by roughly $450 billion. US technology stocks rose 5.2%, with the semiconductor index climbing 8.2%.
| Overnight market | Close or move | Session change |
|---|---|---|
| S&P 500 | 7,437.63 | up 1.66% |
| Nasdaq Composite | 25,122.18 | gained 2.78% |
| Dow Jones Industrial Average | 52,208.06 | rose 1.19% |
| S&P 500 technology sector | — | advanced 5.2% |
| PHLX semiconductor index | — | increased 8.2% |
| US 30-year Treasury yield | 5.2444% intraday | Peak since 2007 |
Jed Ellerbroek, a portfolio manager at Argent Capital Management, said Microsoft might now be seen as part of the “trusted AI winner” group. That label is significant. In recent trading, investors have reacted negatively when AI-related expenses do not generate cash flow. Reuters
Following the close of Wall Street, results provided a mixed picture. Amazon.com NASDAQ:AMZN advanced as cloud revenue surpassed analyst predictions. Apple NASDAQ:AAPL declined, as solid iPhone and Mac sales were offset by services revenue falling short of projections.
| US company | Latest result | Market reaction |
|---|---|---|
| Microsoft | Better-than-expected cloud forecast; capital expenditure lighter than anticipated | Gained more than +15% |
| Amazon | AWS sales up 37% to $42.2 billion | Jumped as high as 9% in after-hours |
| Apple | Revenue grew 16.4% to $109.42 billion | Down roughly -4% after market |
| Apple services | $30.74 billion reported, compared to $31.22 billion forecast | Key concern |
Amazon CEO Andy Jassy stated that “AWS is booming.” Still, the company disclosed negative trailing free cash flow totaling $7.6 billion. This highlights the importance of cash generation in Friday’s tech sector trading. Reuters
Domestic software stocks start the session building on prior momentum. WiseTech Global ASX:WTC advanced 6.67% on Thursday. Xero ASX:XRO climbed 1.43%, and TechnologyOne ASX:TNE was up 1.11%. These stocks are now supported by a markedly stronger offshore lead.
Confirmation for the index is expected from major financial and resources shares. Commonwealth Bank of Australia ASX:CBA, National Australia Bank ASX:NAB, BHP Group ASX:BHP and Rio Tinto ASX:RIO will indicate if the rally is broadening past software.
Rio’s catalyst comes from within. Underlying earnings for the first half climbed 43% to $6.85 billion. For the first time, copper and aluminium together made up 56% of total profits, exceeding iron ore. Rio shares closed up 1.83% on Thursday, while BHP lost 1.71%.
| Australian shares to watch | Thursday move | Friday test |
|---|---|---|
| WiseTech Global ASX:WTC | +6.67% | US software gains may extend rally |
| Xero ASX:XRO | +1.43% | Momentum after auction open in focus |
| TechnologyOne ASX:TNE | +1.11% | Local tech sector participation eyed |
| Rio Tinto ASX:RIO | +1.83% | Copper market and results underpin trade |
| BHP Group ASX:BHP | -1.71% | Attention on miners’ reaction to rebound |
| National Australia Bank ASX:NAB | +0.85% | Financials watched for moves on rates |
Domestic rates continue to act as a balancing factor. Headline inflation eased to 3.8% in June, while the trimmed-mean figure was steady at 3.6%. The Reserve Bank’s cash rate stands at 4.35%, with a policy announcement set for August 11. Governor Michele Bullock stated that the complete impact of prior rate hikes is still unfolding.
Producer price and credit data will be published on Friday after markets begin trading. Next week, data on household spending, cost of living, and trade are scheduled. These results are likely to influence expectations ahead of the RBA’s upcoming policy meeting.
| Australian calendar | Time | Market relevance |
|---|---|---|
| Producer Price Indexes, June quarter | Friday, 11:30 AEST | Tracks business costs and upstream inflation |
| RBA financial and credit aggregates | Friday, 11:30 AEST | Gauges housing and private-credit trends |
| Monthly Household Spending Indicator | Tuesday, 11:30 AEST | Measures consumer demand |
| Selected Living Cost Indexes | Wednesday, 11:30 AEST | Shows household cost pressures |
| International Trade in Goods | Thursday, 11:30 AEST | Reflects export and resource demand |
| RBA policy decision | August 11, 14:30 AEST | Guides cash rate expectations |
Energy stocks receive a more indirect prompt. Brent crude closed down 1.88% at $89.03, and US crude dropped 1.03% to $83.59. Woodside Energy Group ASX:WDS and Santos ASX:STO could continue to benefit from geopolitical backing as Middle East shipping risks persist.
Risks: An increase in long-term bond yields may restrict growth-stock advances. The US 30-year yield reached its highest level in 19 years, and oil prices are still vulnerable to further military actions. Softer producer-price data could benefit stocks sensitive to rates, while stronger numbers may prompt renewed talk of an RBA hike.
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Australia stock market forecast: the rally now needs earnings
Australia's stock market is expected to climb, tracking gains from a rally in U.S. tech stocks. The bigger challenge now lies ahead: the S&P/ASX 200 is trading higher than two stated year-end predictions, and earnings outlooks for sectors other than miners and banks are tightening.
Last updated July 31, 2026 · 08:02 AEST / 00:02 CEST · Market data accurate as of 08:02 AEST
Wall Street provides momentum, though weaker oil prices and lacklustre iron ore result in a mixed outlook for Australian resources stocks.
How markets are positioned at Friday's open
U.S. technology stands out as a definite positive. Commodity indicators provide less clarity.
Markets overnight
Lead commodity
A decline in oil prices reduces an inflation threat, though it may pressure energy stocks. Iron ore trading close to US$98 a tonne offers limited new backing for miners ahead of the market open.
Inflation eases immediate rate risk
The RBA will announce its upcoming decision on August 11 at 14:30 AEST.
Monthly inflation eased from 4.0% recorded in May, with the index for June slipping by 0.1% compared to the previous month. Trimmed-mean inflation for the second quarter stood at 3.6% year on year. Following the data, markets assessed the probability of an August rate increase at 3%, down from 21% earlier.
The earnings headline outpaces the underlying market performance
Consensus estimates for FY26 highlight the importance of August guidance.
With the gap remaining, the index continues to depend on two significant sources of profit. Trading at 19.1 times forward earnings, an overall lift in estimates would benefit the index more than a further increase in the valuation multiple.
Released index checkpoints
Thursday finished with prices confined to a tight band near key housing projections.
These levels serve as reference points, not as a unified market view, due to differing horizons. Dividends are not included in percentage gaps.
Short-term outlook map
No probability has been given. Each scenario hinges on earnings and interest rates.
Potential for gains
Above 9,202.90A decisive move past the 52-week high, supported by upgrades to net earnings, would place the previously published 9,250 checkpoint within reach.
Moderate approach
8,780–9,203Results largely align with expectations. The index remains in a tight range, with dividends making up a greater portion of the overall return.
Potential downside
Below 8,780Sector downgrades widen and support collapses. The 8,500 level is back in focus as high valuations face renewed pressure.
Factors that could boost the market
- August performance that exceeds, instead of just matching, FY27 guidance.
- RBA leaves rates steady on August 11 amid easing services inflation.
- Strong Chinese demand, consistent iron ore levels, and ongoing resilience in U.S. technology.
Key risks
- Profit reductions extend beyond the resources and financial sectors.
- Fresh oil-driven inflation, an interest rate increase by the RBA, or a drop in household spending.
- Industrial action is scheduled at BHP’s Port Hedland operations on August 8–9.
Futures on Friday indicate a steadier open, rather than suggesting a re-evaluation of value. The index is trading close to its 52-week peak and aligned with stated projections, so any lasting shift is expected to be driven by earnings changes. Miners, industrials, and healthcare appear better positioned, while banks, consumer discretionary, and real estate stocks face more sensitivity to interest rates and remain at higher valuations.
