Trump Ceasefire Sparks Tech Sector Surge

What if the biggest opportunity in the market just flashed right in front of you? This week, when Donald Trump announced a temporary ceasefire, the Australian tech sector didn’t just move, it exploded, surging more than 7 per cent in a single day.

In fact, over the past few weeks, the tech sector has already delivered double-digit gains. Now, if you’re wondering how that’s possible, given that tech is typically seen as a high-risk growth sector that struggles when oil prices rise, and global uncertainty builds, it might be time to rethink that view.

Is the tech sector gearing up for a major rebound?

Let's step back for a second. Tech has been smashed, down nearly 50 per cent in just six months. Sentiment has been weak, confidence was shaken, and investors have been sitting on the sidelines waiting for clarity, but here’s how markets really work. They don’t wait for clarity; they move before it.

Weeks before the war, the stock prices of the tech companies were already telling a story. Selling pressure was fading, and key levels were holding. Buyers were quietly stepping in while everyone else was still focused on the headlines. However, this is where it gets even more interesting.

Why does a ceasefire matter so much to tech stocks?

The answer is because it changes the entire macro picture in an instant. Less geopolitical tension means less pressure on oil. Lower oil prices ease inflation, and softer inflation opens the door to more stable interest rates. Tech stocks thrive in this environment.

Just look back through history, and you will see oil and tech move in opposite directions. When oil surges, tech gets crushed under inflation and rising rates. When oil cools, tech stocks come back to life.

So, if oil stabilises from here, that raises the biggest question of all. Has the bottom for Australian tech stocks already been set, even as most investors are still waiting for confirmation? The answer may well just be in this week's buying power, and if April last year taught us anything, it’s this. When the technology sector turns after a deep sell-off based on external factors, it doesn’t crawl higher; it sprints higher.

What are the best and worst-performing sectors this week?

The best-performing sectors include Materials, up over 6 per cent, followed by Financials, up over 5 per cent, and Information Technology, up over 4 per cent. The worst-performing sectors include Energy, down over 3 per cent, followed by Utilities, down over 1 per cent and Consumer Staples, slightly down, under half a per cent.

The best-performing stocks in the ASX top 100 include NEXTDC Limited, up over 14 per cent, followed by Greatland Resources, up over 13 per cent, and Lynas Rare Earths, up over 1 per cent. The worst-performing stocks include Whitehaven Coal, down over 7 per cent, followed by Woodside Energy, down over 4 per cent and AGL Energy, down over 2 per cent.

What's next for the Australian stock market?

The All Ordinaries delivered a powerful move this week, surging more than 4 per cent. To put this into perspective, you have to go back to the COVID-driven rebound in 2020 to find a weekly gain of that magnitude. Moves like this don’t come around often, and when they do, they usually signal something meaningful is shifting beneath the surface.

What stands out even more is the clean break back above the 9,000 level. This has been a key battleground for months, and reclaiming it puts the market firmly back on the front foot. We’re now trading at levels last seen in February and, perhaps most impressively, the market has worked its way back into positive territory for the year. That’s a sharp turnaround considering we were staring at a double-digit decline just weeks ago.

Although the recovery has been strong so far, there’s still a major test ahead. The 9,300 level has consistently acted as stubborn resistance, and it now becomes the next real hurdle. Momentum can drive markets higher in the short term, but levels like this tend to determine whether a move has real staying power.

Financials and Materials have carried the index higher, and for this move to continue, participation needs to widen. Strong trends are built on broad-based strength, not just a couple of dominant sectors carrying the load.

Energy pulled back slightly this week on ceasefire developments, easing pressure on oil prices, but that story is far from over. If tensions flare again and oil spikes, it creates a difficult balance; strength in energy stocks on the one hand, but renewed inflation pressure weighing on the rest of the market.

For now, it’s important to recognise just how strong this rebound has been. The speed and structure of the move suggest there’s real intent behind it. If momentum holds and external conditions remain supportive, a push toward all-time highs by month's end isn’t out of the question.

The key from here is discipline. Strong rallies can be tempting, but they also demand focus. Watch how price behaves around 9,300 and let the market confirm whether this move has more to give.

Good luck and good trading.

Dale Gillham is the Chief Analyst at Wealth Within and the international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of the award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good bookstores and online.

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