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Index Update: The Australian share market rallied on Tuesday, with the S&P/ASX 200 climbing 106.70 points, or 1.23%, to close at 8,770.40, rebounding from Monday’s muted session. Investor sentiment improved ahead of next week’s Reserve Bank of Australia monetary policy decision, driving broad-based gains across all 11 sectors. Consumer Discretionary led the market higher, rising 1.81% on the day and 3.30% over the past five sessions. Over the last five days, the benchmark index has advanced 0.76% and now sits just 0.07% below its 52-week high.

Macro Update: Household spending in Australia edged up 0.5% in June on seasonally adjusted basis, according to the latest Australian Bureau of Statistics (ABS) data. The increase followed a 1.0% rise in May and a flat reading in April. Stronger goods spending, up 1.3% on higher outlays for food, new vehicles, and electronics, offset a 0.5% decline in services spending after two months of growth. Compared to June last year, total household spending was 4.8% higher, led by notable annual increases in recreation and culture (+7.9%), food (+7.5%), and health (+7.2%).

Top Market Movers: Top market movers saw Credit Corp Group (ASX: CCP) surge 16.19% to AUD 17.73, leading gainers alongside Iluka Resources (ASX: ILU), up 8.65% to AUD 5.78, and IDP Education (ASX: IEL), rising 7.97% to AUD 3.93. On the downside, Telix Pharmaceuticals (ASX: TLX) slid 8.45% to AUD 18.53, while Endeavour Group (ASX: EDV) fell 2.89% to AUD 4.04 and Light & Wonder (ASX: LNW) eased 2.25% to AUD 142.32.

Commodity Update: The U.S. dollar fluctuated on Tuesday amid growing expectations of Federal Reserve rate cuts following the release of a weak U.S. jobs report. Investor sentiment was further pressured by concerns over the broader economic impact of recently imposed U.S. tariffs. Gold edged up 0.08% to USD 3,429.10, silver rose 0.35%, copper added 0.12%, while Brent crude slipped 0.10% to USD 68.72, stabilising after recent losses driven by increasing supply and demand concerns.

Our Stance: Tuesday’s rally in the S&P/ASX 200 reflects a cautious optimism, with investors positioning ahead of the RBA’s upcoming policy decision. Broad-based sector gains, particularly in Consumer Discretionary, suggest confidence in domestic demand despite slowing services spending. The latest ABS data showing a 0.5% rise in June household spending underpins this sentiment, with goods demand offsetting service softness. Coupled with a softer U.S. dollar and stable commodities, the market appears balanced, though sensitive to upcoming central bank signals.

In its latest trading session, the S&P/ASX 200 Index advanced 106.70 points to close at 8,770.40, supported by a bullish candlestick pattern and strong trading volumes, reflecting continued investor confidence. Technically, the index remains above its 21-period Simple Moving Average (SMA), reinforcing a near-term bullish outlook. A key resistance level to watch is 8,810 a decisive breakout above this threshold could mark a meaningful bullish shift, potentially improving market sentiment and paving the way for further upside. From a broader perspective, the index’s position above the 50-period SMA on the weekly chart underscores a solid long-term bullish trend. However, sustaining current momentum will depend on the index’s ability to surpass and hold above 8,810.