Investing.com - The S&P/ASX 200 rallied back above the 7000 mark on Tuesday, driven by dovish remarks from US Federal Reserve members and promising signs of inflation cooling down in NAB’s monthly business survey.
The benchmark rose 78 points, or 1.1%, to 7048, after trading below the 7000 level for the majority of the past week. The ASX All Ordinaries index saw similar advances on Tuesday.
All 11 sectors saw gains, with rate-sensitive technology and real estate stocks increasing by more than 2%.
Utility stocks were the top performers, rising by 3.9% thanks to a 4.8% surge in Origin Energy Ltd (ASX:ORG). This came after Australia’s competition watchdog gave the green light to an $18.7 billion acquisition offer for the electricity and gas wholesaler.
Energy stocks also climbed 1.3% as crude oil prices retained the previous day’s gains amidst escalating violence in the Middle East. Woodside Energy Ltd (ASX:WDS) and Santos Ltd (ASX:STO) saw increases of 1.3% and 0.9%, respectively.
Meanwhile, dovish comments from US Federal Reserve members overnight boosted sentiment. These officials suggested that the recent surge in long-term Treasury yields might reduce the need for the US central bank to raise its benchmark interest rate again. Following these comments, Wall Street rallied, with the Dow Jones Industrial Average and the S&P 500 both climbing 0.6%, and the NASDAQ Composite increasing by 0.4%.
Back home, NAB’s September business survey revealed that labour cost growth slowed to 2% in quarterly equivalent terms, while purchase cost growth actually fell to 1.8%. Overall price growth also eased to 1%.
Australian bonds now indicate a 45% chance of an increase from the Reserve Bank by May next year, down from 52% yesterday and 74% last week. Traders also reintroduced the possibility of a rate cut, attributing a 31% chance by December next year, a contrast to zero chance last week.