Australian market set to rebound as Middle East tensions lift oil prices and Wall Street slips

Australian equities are expected to open slightly higher, with ASX futures up 0.2%, suggesting a modest rebound from the previous day's 1% decline that took the index to a six-week low. The recovery comes as oil prices surged to a six-week high, with Brent futures rising 2.5% to about $99 per barrel following reports that Houthi forces in Yemen attacked four Saudi cities, igniting oil installations and wounding more than 70 people.

The escalation prompted a pull-back on Wall Street, where the Dow Jones dropped 1.2% and the S&P 500 and Nasdaq fell 0.6% and 0.3% respectively. The Australian dollar edged up to 72.2 US cents, while other markets such as the FTSE and Stoxx 600 slipped marginally. U.S. forces also struck Iranian tankers linked to the IRGC in response to Iranian attempts on a U.S. Navy ship. Overall, the market moves underscore the sensitivity of equities and currencies to Middle East developments and oil price volatility.