The S&P/ASX200 rose 21.4 points on Wednesday, up 0.24 per cent, to 8,808.4, as the broader All Ordinaries improved by 24.3 points, or 0.27 per cent, to 9,012.6.
Nine of 11 local sectors ended the day higher as energy stocks and miners fell behind and mixed May inflation figures left the door open to further interest rate hikes in 2026.
May headline CPI came in cooler than expected at four per cent year-on-year, while the RBA's preferred trimmed mean measure rose to 3.6 per cent from 3.4 per cent in April.
Materials clocked a fifth straight session of losses as an increasingly hawkish outlook for US borrowing costs continued to bolster the greenback, weighing on metals prices and the global growth outlook.
"The biggest thing that is psychologically important to the market here is the Fed (US Federal Reserve), and whether it can kick and build and become a saturated consensus trade into this long US dollar position," Pepperstone head of Research Chris Weston told AAP.
"And that has an impact on materials stocks, and obviously the commodities that they're selling."
The energy sector fell more than one per cent as oil prices slumped to their lowest level since the beginning of the Persian Gulf conflict, weighing on Santos, Woodside and refinery operators Viva Energy and Ampol.
Coal miners were broadly weaker while uranium stocks bounced after days of selling.
The financials sector staged a modest 0.3 per cent improvement, as NAB led three of the big four banks into the green while ANZ lost ground.
IT stocks outperformed the bourse, soaring more than five per cent in a broad-based rally led by rebounds in segment giants WiseTech Global and Xero.
Health care stocks were also strong, surging more than two per cent with big moves from Telix Pharmaceuticals, CSL and Pro Medicus.
In company news, Westpac appointed Macquarie's Richard Heeley as chief information officer, to replace the retiring Scott Collary.
Baby Bunting shares tumbled by more than a tenth after it cut its 2026 profit guidance by roughly 12 per cent.
The Australian dollar is buying 69.06 US cents, down from 69.53 US cents on Tuesday at 5pm AEST after dipping to 11-week lows against the greenback shortly after May inflation figures were released.
"While domestic events and the Aussie's disappearing yield advantage are clearly playing a role in the AUD/USD decline, so too is the resurgent USD which looks like a volcano primed to erupt," IG market analyst Tony Sycamore said.
"The next few domestic data prints — starting with tomorrow's jobs report — will be crucial in deciding whether the Aussie can find any near-term footing or whether the AUD/USD extends its decline."
ON THE ASX:
* The S&P/ASX200 gained 21.4 points, or 0.24 per cent, to 8,808.4
* The broader All Ordinaries rose 24.3 points, or 0.27 per cent, to 9,012.6
One Australian dollar trades for:
* 69.06 US cents, from 69.53 US cents at 5pm AEST on Tuesday
* 111.67 Japanese yen, from 112.40 Japanese yen
* 60.79 euro cents, from 60.86 euro cents
* 52.37 British pence, from 52.55 British pence
* 112.19 NZ cents, from 122.28 NZ cents
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