The S&P/ASX200 rose 53.8 points on Tuesday, up 0.6 per cent to 8,947.8, as the broader All Ordinaries gained 48.2 points, or 0.53 per cent, to 9,112.
In a mostly hawkish speech to the Anika Foundation, Reserve Bank governor Michele Bullock noted that while demand growth was moderating as expected after three cash rate increases in 2026, housing and jobs market conditions had eased more steeply than predicted.
Market expectations for another interest rate hike by year's end were pushed out to March 2027, boosting local stocks with consumer cyclicals leading the charge, up 2.7 per cent.
"An interesting little arbitrary repricing there following the speech, probably helped along by the fall in oil prices this week, and it's why consumer discretionary stocks have been the number-one performer today," IG market analyst Tony Sycamore told AAP.
"Whether it turns out to be a false move ahead of tomorrow's critical June quarter CPI (consumer price index) number remains to be seen."
The Australian rally came as indices in Asia dipped, with South Korea's KOSPI tumbling more than 10 per cent while tech-heavy exchanges continued to unwind from their recent rallies.
"The ASX200 is up in five of the past six sessions and its highest daily close in almost six weeks, continuing to benefit from its position as a low-beta safe haven," Mr Sycamore said.
The raw materials sector missed the party, tumbling 1.4 per cent as gold, copper and iron ore prices eased.
Financials gained 0.9 per cent as CommBank led the big four higher with a 1.5 per cent boost to $178.78, putting the segment within two per cent of April's record high.
Energy stocks also rallied, with strong performances from Woodside and Santos despite oil prices hanging onto their recent losses as Brent crude traded below $US85 a barrel.
Refinery operator Viva Energy rocketed more than eight per cent higher after a strong quarterly update, eclipsing a decent gain from competitor Ampol.
The moves came as the Albanese government announced a $4 million feasibility study to build a large-scale oil refinery in WA.
Elsewhere, consumer-facing stocks, health care, communications, IT stocks and real estate trusts also made solid gains.
In company news, Harvey Norman and Latitude were ordered to pay $35 million and $20 million respectively after the Federal Court found a 2021/2022 credit card promotion was misleading.
Web Travel shares soared more than 17 per cent after announcing a $90 million share buyback on the back of strong earnings growth.
The Australian dollar is buying 69.71 US cents, down from 70.06 US cents on Monday at 5pm.
ON THE ASX:
* The S&P/ASX200 rose 53.8 points, or 0.6 per cent, to 8,947.8
* The broader All Ordinaries improved by 48.2 points, or 0.53 per cent, to 9,112
One Australian dollar trades for:
* 69.71 US cents, from 70.06 US cents at 5pm AEST on Monday
* 114.12 Japanese yen, from 114.55 Japanese yen
* 61.32 euro cents, from 61.41 euro cents
* 52.42 British pence, from 52.48 pence
* 120.80 NZ cents, from 120.72 NZ cents
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