Morning Wrap: ASX 200 to rally, Commodity prices bounce, S&P 500 and Nasdaq surge on Iran-de-escalation

In a nutshell:

• S&P 500 jumped 1.7% and the Nasdaq 2.5% after Trump called off Iran strikes and signalled a deal is close, sparking a broad risk-on bounce

• VIX fell ~12% as the Russell 2000 led gains up 3.02%, with tech, industrials and materials driving the turnaround

• Most commodities bounced more than 3%, the ECB delivered its first rate hike since 2023, and SpaceX prices its $1.75tn Nasdaq mega-IPO

Let's dive in.

• Major US benchmarks closed sharply higher and near best levels after Trump cancelled last night’s bombing and said Tehran approved of a draft agreement to extend ceasefire

• Classic stocks up as oil, yields and VIX fall, with the S&P 500 recording its best day since 8-Apr (initial ceasefire announcement)

• Broad bounce for commodities, with silver up 6.2%, palladium up 4.4%, platinum up 3.5%, gold up 3.5% and copper up 3.0%

• Russell 2000 led the rally, climbing 3.02% as small caps outperformed on the broad risk-on rotation

• VIX fell 12% to 19.4, unwinding much of yesterday’s spike as geopolitical fears eased

• SpaceX set to price its IPO after Thursday's close at a fixed $135 per share, raising about $75bn at a roughly $1.75tn valuation, the largest listing on record (CNBC) 

• Junk bond yield premium over investment-grade securities hits 14-month high (BBG)

• Iran war intensifies 'super-squeeze' in metals markets, disrupting copper and aluminum supplies (BBG)

• Gold hits six-month low, analysts see upcoming IPOs draining liquidity from gold, crypto assets (FT)

• Trump said the US would hit Iran "very hard tonight" and take "total control" of the country's oil and gas industry, threatening to seize Kharg Island

• Trump later called off the strikes and gave his clearest signal yet that an Iran deal may arrive soon, fuelling the equity rally

• Iran threatened to treat all of Elon Musk's Middle East companies, including SpaceX's Starlink, as military targets, one day before SpaceX's planned Nasdaq debut

• Adobe Q2 FY26: revenue up 13% to a record $6.62bn vs $6.45bn ests, non-GAAP EPS $5.96 vs $5.82 ests, ARR exiting quarter at $27.1bn, raised FY26 revenue and EPS guidance, CFO departs, shares down 5.9% after hours (BW)

• Oracle tumbled 8.5% after its Q4 result as the company announced a $40bn raise, with capex spend exceeding expectations (TS)

• OpenAI weighs drastically reducing token costs as it seeks to win customers from Anthropic (WSJ)

• SK Hynix to triple wafer capacity by 2034 to meet surging demand for memory chips (NK)

• China abruptly cancels planned meetings with EU in Beijing amid trade frictions (FT)

• Indian PM Modi likely to meet Trump at G7 summit next week (BBG)

• ECB hiked rates by 25 bps to 2.25%, its first increase since 2023, to counter Iran war inflation pressures (CNBC)

• ECB lifted its 2026 inflation forecast to 3% and cut 2026 growth to 0.8%, with Lagarde rejecting the idea it was merely an insurance hike (CNBC)

• US PPI rose 1.1% month-on-month in May vs ests of 0.7%, and 6.5% year-on-year, the hottest annual reading since November 2022 (CNBC)

• Core PPI up 0.4% month-on-month, just below the 0.5% consensus, signalling fuel prices are driving most of the inflation burden (CNBC)

• World Bank cut its 2026 global growth forecast to 2.5% from 2.9%, citing Iran war fallout, and warned growth could fall to 1.3% if energy disruptions deepen (BBG)

• World Bank expects China growth of 4.2% this year, down from 5% in 2025, while Eurozone growth is seen at just 0.8% (AP)

• US inflation erases a year's worth of inflation-adjusted wage gains, leaving real pay up only 0.1% since Trump took office (AX)

• Japan large manufacturer sentiment turns negative in Q2 as Middle East conflict weighs (RT)

• ANZ New Zealand CEO Antonia Watson to retire, replaced by NZ Chief Risk Officer Ben Kelleher (ANZ)

• Brazilian Rare Earths announces Velhinhas airborne geophysics and drilling unlocks ~9 km rare earth corridor (BRE)

• ResMed added as a new short idea with potential ~30% downside at Hedgeye, analysts cited “As GLP-1s get cheaper, oral and multi-condition, we think the sleep apnea TAM starts shrinking at the margin” (SA)

• Resource bounce: A massive rally for most resources overnight, driving overnight ETFs sharply higher, notably Rare Earths/Strategic Metals (+9.2%), Copper Miners (+7.3%), Silver Miners (+6.5%), Uranium (+5.8%) and Gold Miners (+5.3%). Volatility remains very high against an ever-changing backdrop of more conflict vs. imminent peace deal. The monster wave of IPOs and megacap debt/equity issuance may also be weighing on liquidity-sensitive commodities like gold. Nevertheless, the underlying narrative for most commodities remains strong, underpinned by an insatiable demand for AI-related capex, defence spending, still-solid macro and the lack of new supply. NYSE-listed BHP, Rio Tinto and Newmont shares rallied 6.0%, 4.6% and 5.2% respectively.

• Aussie 10-year: Didn’t notice the 10-year falling 7 bps yesterday, to a fresh three-month low of 4.83%. Encouraging to see yields fall from rather uncomfortable levels. 

• Oil tumbles: Brent down 6.1%  to US$89.14, the lowest since 6 March. Though S&P 500 Energy sector down 1.9%, and still relatively rangebound. Energy stocks are stuck at an awkward junction where they, more broadly speaking, still produce double-digit FCF yields at US$80-90 a barrel (even US$70 in some cases).

Broker data is currently pending. Check out tonight's Evening Wrap for a full breakdown for analyst updates.

Stocks trading ex-dividend: 

• Fri 12 Jun: ALS (ALQ) – $0.231, Dyno Nobel (DNL) – $0.046

• Mon 15 Jun: Transmetro (TCO) – $0.06, Plato Income Maximiser (PL8) – $0.006, Spheria Emerging Companies (SEC) – $0.011

• Tue 16 Jun: None

• Wed 17 Jun: Select Harvests (SHV) – $0.035, WAM Active (WAA) – $0.01, WAM Income Maximiser (WMX) – $0.006

• Thu 18 Jun: AFT Pharmaceuticals (AFP) – $0.016

Other ASX corporate actions today:       

• Dividends paid: Dalrymple Bay Infrastructure (DBI), TechnologyOne (TNE)

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 4:00 pm: UK GDP

• 12:00 am: US Consumer Confidence