Why Trump's ceasefire triggered a 7% surge in Aussie tech

A Trump-brokered ceasefire calmed markets and lit a fire under Australian tech shares. Here's why investors piled back in.

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% 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.

So here's the real question: despite what history would suggest, is the surge the clearest signal yet that the tech sector is gearing up for a major rebound?

Let's step back for a second. Tech has been smashed, down nearly 50% 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 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? 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 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 more than 6%, followed by Financials, up more than 5%, and Information Technology, up more than 4%.

The worst-performing sectors include Energy, down more than 3%, followed by Utilities, down more than 1%, and Consumer Staples, slightly down, under 0.5%.

The best-performing stocks in the ASX top 100 include NEXTDC Limited, up more than 14%, followed by Greatland Resources, up more than 13%, and Lynas Rare Earths, up more than 1%.

The worst-performing stocks include Whitehaven Coal, down more than 7%, followed by Woodside Energy, down more than 4%, and AGL Energy, down more than 2%.

What's next for the Australian stock market?

The All Ordinaries delivered a powerful move this week, surging more than 4%. 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 9000 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 9300 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 9300 and let the market confirm whether this move has more to give.

Get stories like this in our newsletters.