ASX to open higher after Wall Street rally; Rare earths stocks in focus

3 hours ago 2

By Staff writers

October 21, 2025 — 7.25am

The Australian sharemarket is set for gains this morning after Wall Street pulled US stocks near their records overnight thanks to cooling trade tensions and solid company results.

Rare earths stocks are expected to be in the spotlight after Prime Minister Anthony Albanese and US President Donald Trump signed a landmark critical minerals deal that will pave the way for joint rare earths projects between the two countries, as well as US projects in Australia.

ASX futures were up 47 points, or 0.5 per cent, at 9089 as of 6.59am AEDT, suggesting the local bourse will rise further after a banking rally sent it 0.4 per cent higher on Monday. The Australian dollar traded flat at US65.13¢ as of 6.58am AEDT.

The deal signed by Donald Trump and Anthony Albanese is likely to put the focus once again on rare earths stocks.

Addressing reporters with Trump at the White House after the meeting, Albanese said Australia and the US would each contribute $1 billion over the next six months for rare earths projects that are immediately available, and the deal would unlock an $8.5 billion pipeline of projects.

“In about a year from now, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” Trump said.

Australia’s rare earths producers have had a massive run this year, which accelerated after China earlier this month announced tighter global export controls of the minerals, which are crucial for industries covering semiconductors, defence technology, renewable energy and other sectors.

Lynas, the nation’s biggest rare earths miner, and the only producer of so-called heavy rare earths outside China, has seen it share price more than triple this year, while Arafura Rare Earths’ market valuation quadrupled.

On Wall Street overnight, technology shares proved much of the upside muscle for the market, as generally upbeat quarterly earnings results helped revive investor risk appetite after last week’s rollercoaster ride.

The S&P 500 rose 1.1 per cent and got back within 0.2 per cent of its all-time high set earlier this month. The Dow Jones Industrial Average also gained 1.1 per cent, and the Nasdaq composite jumped 1.4 per cent.

Apple stock climbed 3.9 per cent to a record high after Loop Capital upgraded the stock to buy from hold, becoming the latest firm to cite positive iPhone demand trends. Meta, Netflix and Google owner Alphabet gained between 1.3 per cent and 3.3 per cent. Micron shares rose 2.2 per cent and hit a record after Barclays raised its price target on the stock.

Amazon’s shares held up despite a widespread outage for its cloud computing service that caused disruption for internet users around the world overnight, with issues continuing to affect its operations early this morning. The stock rose 1.6 per cent.

Among other stock moves, Boeing advanced 1.8 per cent after the planemaker won approval from the US Federal Aviation Administration to raise 737 MAX production to 42 planes per month.

WeightWatchers surged 9.3 per cent following the company’s announcement that it would partner with Amazon for weight-loss drug delivery.

With the earnings season well underway, about 85 per cent of the companies in the S&P 500 reporting results so far have beaten profit expectations, which helped fuel the rebound in equities.

Cleveland-Cliffs helped lead the way with a jump of 19 per cent after the steel company’s chief executive Lourenco Goncalves said it would provide details soon about a potential deal with a major global steel producer that could mean bigger profits. He also said Cleveland-Cliffs has potentially found rare earths at sites in Michigan and Minnesota.

Another source of worry for Wall Street, from the banking industry, also appears to be easing. Stocks of smaller and midsized banks climbed overnight, recovering some of their losses after a couple raised alarm bells last week by warning about potentially bad loans they’ve made.

The disclosures had raised questions about whether the growing list of problems is just a collection of one-offs or a signal of something larger threatening the entire industry.

This will be a heavier week for corporate earnings reports in the US generally. Big names delivering their latest results will include Coca-Cola tonight, Tesla on Wednesday [early Thursday AEDT] and Procter & Gamble on Friday.

The pressure is on companies to show that their profits are growing because they need to justify the big gains their stock prices have made. The S&P 500 is still near its all-time high, which was set earlier this month following a torrid 35 per cent run from a low in April.

Delivering bigger profits is one of the easiest ways for companies to quiet criticism that stock prices have gone too high. The other is for stock prices to fall.

Corporate profit reports have also taken on more importance because they’re offering windows into the strength of the US economy when the government’s shutdown has delayed many important economic updates.

That’s making the job of the Federal Reserve more difficult, as it tries to decide whether high inflation or the slowing job market is the bigger problem for the economy. Fed officials have indicated they’re likely to cut interest rates a few more times through next year to give the economy a boost. But that could be a mistake if inflation worsens as low rates can push prices even higher.

In light of this, market sentiment was given an extra boost by White House economic advisor Kevin Hassett, who said the government shutdown is likely to end this week.

In the bond market, Treasury yields held relatively steady. The yield on the 10-year Treasury eased to 3.99 per cent from 4.02 per cent late on Friday.

In other international markets, indexes rose across much of Europe and Asia.

Japan’s Nikkei 225 jumped 3.4 per cent, after its governing Liberal Democrats found a new coalition partner, securing support for its leader Sanae Takaichi to become the country’s first female prime minister. Investors expect Takaichi to push for low interest rates, higher government spending and other policies that could help the market.

Indexes rose 2.4 per cent in Hong Kong and 0.6 per cent in Shanghai after China reported its economy grew at a 4.8 per cent annual pace in the last quarter, supported by relatively strong exports as companies increased shipments markets other than the US.

Still, it was the slowest pace in a year. The world’s second-largest economy is still struggling to emerge from a prolonged downturn in its property market and to encourage consumers and businesses to spend more.

with AP, Reuters and Bloomberg

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