Index Update: The S&P/ASX 200 closed higher on Tuesday, rising 78.50 points or 0.89% to 8,857.10 and moving back above its 125-day moving average. Despite the gain, the index remains down 0.95% over the past five days and sits 2.83% below its 52-week high. Market breadth was positive, with 10 of 11 sectors finishing in the green. Information Technology led the gains, advancing 1.89% as it rebounded from recent weakness, though the sector remains down 5.70% over the past five sessions. The Australian sharemarket was supported by a rebound in gold prices, even as gains were pared following the Reserve Bank of Australia’s unanimous decision to lift borrowing costs for the first time since 2023.

Macro Update: The Reserve Bank of Australia raised its cash rate to 3.85%, up from 3.6%, marking the first hike in over two years. The decision follows the shortest rate-cutting cycle in modern history and comes as annual inflation surged to 3.8%, above the 2–3% target. The RBA cited stronger-than-expected private demand, tight labour conditions, and rising capacity pressures, noting that inflation is likely to remain elevated for some time. Mortgage holders are expected to feel the impact of the move.

Top Market Movers: On Tuesday, Droneshield Limited (ASX:DRO) led gains, rising AUD 0.27 or 7.83% to AUD 3.72, followed by Newmont Corporation (ASX:NEM) up AUD 8.79 (5.64%) to AUD 164.75, and Capstone Copper Corp. (ASX:CSC) gaining AUD 0.81 (5.09%) to AUD 16.73. On the downside, Neuren Pharmaceuticals Limited (ASX:NEU) fell AUD 1.62 (-9.97%) to AUD 14.63, with Ventia Services Group (ASX:VNT) down AUD 0.25 (-4.31%) and GrainCorp Limited (ASX:GNC) slipping AUD 0.22 (-3.56%) to AUD 5.97.

Commodity Update: The U.S. dollar held firm on Tuesday, supported by upbeat economic data and shifting expectations around Federal Reserve policy, which outweighed concerns over a potential U.S. government shutdown. Commodities posted broad gains, with gold rising 3.36% to USD 4,810.50, silver climbing 7.04% to USD 82.41, and copper advancing 0.60% to USD 13,008.90. Brent crude edged up 0.20% to USD 66.42 after sharp losses, as easing U.S.–Iran tensions reduced risk premiums.

Our Stance: The Australian sharemarket rebounded on Tuesday, with the S&P/ASX 200 rising 78.50 points or 0.89% to 8,857.10, reclaiming its 125-day moving average. Gains were broad-based, led by Information Technology, though the sector remains under pressure after recent weakness. Commodities posted strong gains, with gold, silver, and copper advancing, while the Australian dollar surged following the Reserve Bank’s first rate hike in two years. Despite positive momentum, the market remains slightly below recent highs, suggesting cautious optimism as investors weigh supportive commodity trends against ongoing global and macroeconomic uncertainties.

In the latest session, the S&P/ASX 200 Index advanced 78.50 points to close at 8,857.10, forming a bullish candlestick supported by strong trading volumes, reflecting sustained investor confidence. Technically, the index continues to trade above its 50-period Simple Moving Average (SMA) on the daily chart, which acts as a key dynamic support and reinforces the short-term uptrend. The 8,800 support zone remains critical; holding this level may encourage consolidation and further upside, while a break below could trigger near-term volatility. On the weekly timeframe, the index remains well above its 50-period SMA, highlighting a strong medium- to long-term technical setup and confirming that the broader trend remains firmly positive despite short-term fluctuations.