Key Takeaways
- The S&P/ASX 200 (XJO) reached a historic all-time high of 9,216.10 points, fueled by resilient domestic spending data and positive spillover from Wall Street.
- President Donald Trump predicted a massive "relief trade" in energy markets, claiming U.S. gasoline prices could "drop through the floor" if the Strait of Hormuz reopens.
- The Japanese Yen surged to a three-month high near ¥155 following a rare joint intervention by the U.S. Treasury and the Bank of Japan to stabilize the currency.
- Global oil prices retreated over 5% to approximately $83 per barrel as diplomatic efforts led by Qatar and Oman signaled a potential breakthrough in the five-month U.S.-Iran conflict.
The Australian share market hit a significant milestone on Wednesday, with the benchmark S&P/ASX 200 (XJO) surging to a record intraday high of 9,216.10 points. This rally was underpinned by a 3.1% jump in mining giant BHP Group (BHP) and stronger-than-expected July services activity data. Market sentiment remains bullish as investors look past interest rate concerns, encouraged by a robust U.S. earnings season where 86% of companies have exceeded expectations.
In the United States, President Donald Trump has intensified pressure on energy giants, asserting that gas prices should fall immediately as diplomatic "perimeters" for a deal with Iran take shape. Trump specifically criticized ExxonMobil (XOM) and Chevron (CVX) for record profits during the conflict, which has largely halted the flow of 20% of the world's crude oil through the Strait of Hormuz. The President suggested that a successful reopening of the waterway would see retail petrol prices return toward the $2.25 per gallon level.
Currency markets experienced a dramatic shift as the U.S. Dollar fell to a six-week low against a basket of currencies, primarily driven by a sharp recovery in the Japanese Yen. Following a period where the Yen touched 40-year lows beyond ¥163, a coordinated intervention by U.S. and Japanese regulators successfully pushed the pair back toward ¥157. Treasury Secretary Scott Bessent confirmed the joint action, noting that financial stability in Japan is critical to preventing a spike in U.S. Treasury yields.
The broader geopolitical landscape is showing signs of de-escalation, with U.S. officials eyeing a potential deal to restore maritime traffic "today or tomorrow." While Tehran has officially denied direct talks with Washington, mediating partners in Qatar and Oman report that negotiations for a "temporary" transit route are in progressive stages. This optimism has already triggered a 4% slide in Brent crude futures, providing much-needed relief to global inflationary pressures.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.