The benchmark S&P/ASX200 index on Thursday recouped nearly all of Wednesday's losses, rising 50.6 points, or 0.59 per cent, to 8,589.2. The broader All Ordinaries gained 48.8 points, or 0.56 per cent, to 8,826.7.
In the US, minutes from the June meeting of the Federal Reserve's rate-setting committee showed that most participants judged a rate cut would be appropriate this year, with a couple favouring one as soon as this month.
The Fed hasn't cut rates since December and Barclays said it remained of the view the Fed would do so again this December, while Citi analysts projected the US central bank would cut in September.
Meanwhile in Europe, German Chancellor Friedrich Merz said he was "cautiously optimistic" the European Union could reach a trade deal with the US in coming days, avoiding punishing tariffs.
US stocks rose, with the S&P500 climbing 0.6 per cent and the tech-heavy Nasdaq rising 0.9 per cent, and that momentum carried over to the Australian session.
Seven of the ASX's 11 sectors finished higher, with energy, health care, technology and telecommunications lower.
The property and industrial sectors were the biggest movers, both gaining one per cent. GPT Group climbed 1.4 per cent and Computershare rose 2.1 per cent.
In the heavyweight mining sector, goldminers bounced back from Wednesday's sharp selloff as the precious metal rose $US30 to trade for $US3,330 an ounce.
Evolution climbed 3.6 per cent, Northern Star rose 1.5 per cent and West African Resources added 3.1 per cent.
As for the iron-ore giants, Fortescue gained 1.9 per cent to $38.30, BHP advanced 1.2 per cent to $38.30 and Rio Tinto advanced 1.0 per cent to $108.62.
In the financial sector, all of the big four banks were higher.
ANZ gained 0.8 per cent to $30.29, NAB climbed 1.1 per cent to $39.74, Westpac added 0.5 per cent to $33.87 and CBA grew 0.8 per cent to $180.37.
In health care, Imrico Medical Systems sank 15.1 per cent to a three-month low of $1.32 after the cardiac-catheter company indicated regulatory approval for one of its products in the US had fallen behind schedule.
The Australian dollar was trading for 65.55 US cents, from 65.20 US cents at midday on Wednesday.
ON THE ASX:
* The benchmark S&P/ASX200 index on Thursday rose 50.6 points, or 0.59 per cent, at 8,589.2
* The broader All Ordinaries gained 48.8 points, or 0.56 per cent, to 8,826.7
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.55 US cents, from 65.42 US cents at 5pm on Wednesday
* 95.86 Japanese yen, from 96.07 Japanese yen
* 55.87 euro cents, from 55.79 euro cents
* 48.16 British pence, from 48.10 pence
* 109.02 NZ cents, from 108.88 NZ cents
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