The Australian sharemarket on Tuesday posted its biggest one-day gain in more than two years after US futures rallied and investors raced to buy up stocks that were thumped at the start of the week.

The S&P/ASX 200 Index finished up 2.3 per cent, or 166.7 points, to 7510 points – its strongest gain since November 2022 – which helped recoup some of Monday’s 4.2 per cent slump triggered by China’s retaliatory tariffs on the US. The All Ordinaries jumped 2.4 per cent.

US futures pointed to some relief on Tuesday after volatility gripped Wall Street overnight, when the benchmark S&P 500 traded in a more than 410-point range. Asset prices swung as US President Donald Trump threatened additional 50 per cent tariffs on Chinese imports.

Off to the races?

S&P 500 futures were up more than 1 per cent near 4pm (AEST) as experts ramped up US rate cut bets. Beijing responded to Trump’s threat, saying it would “resolutely take countermeasures”, while a gauge of Chinese technology equities listed in Hong Kong rebounded on Tuesday after plummeting more than 14 per cent in the previous session.

On the ASX, all 11 sectors finished higher as energy, mining, and technology rebounded from heavy losses in the previous session. But Andrew Dale, a partner at ECP Asset Management, said Australian equities were unlikely to head into a sustained rally despite the market’s already substantial correction.

“We’re seeing a little bit of a relief rally, but there’s nothing that I’m seeing in the macro data or economically that would enable one to take the view that [the sell-off] is now all over, and we’re off to the races. Absolutely not.”

ASX technology stocks rallied, buoyed by WiseTech’s 5 per cent jump to $80.35 and Life360’s 8 per cent rally to $18.07. Payments provider Zip added 6.7 per cent, closing at $1.27 after it announced an on-market buyback of up to $50 million.

Stocks in focus

Santos led a rally in energy stocks after the sector’s sizeable losses on Monday. The oil and gas explorer added 5.4 per cent to close at $5.66.

Miners also recovered, bucking a weaker iron ore price, with Singapore’s benchmark futures contract dropping 2.4 per cent to $US95.20. Index bellwether BHP advanced 2.3 per cent to $35.38 and Fortescue 3.5 per cent to $14.82. Gold miner Evolution tracked a recovery in the gold price, with the stock adding 5 per cent to $6.76.

A late rally in the banks was led by Commonwealth Bank, which closed up 2.8 per cent at $148.46. The Australian dollar also edged back above US60¢ after nearing a five-year low overnight.

In corporate news, Mexican-style food chain Guzman y Gomez advanced 3.7 per cent to $31.10 and said it is on track to pay its first-ever dividend after posting strong sales growth in the third quarter.

And Pro Medicus jumped 6.4 per cent to $188.14 after Barrenjoey upgraded the imaging software play to “overweight”.