A broad-based rally on the ASX could be forgotten within hours as Wall Street investors brace for figures which one analyst tipped will show peak inflation.
Energy and technology shares were the best performers on Wednesday as the ASX almost recovered losses from earlier in the week.
Energy shares gained about three per cent as mounting COVID-19 infections across the world hinder oil supply and send prices higher.
Soaring energy prices have been a feature of the global economy's recovery from the pandemic.
Pepperstone head of research Chris Weston tipped energy would contribute greatly to US inflation figures due tonight.
Headline inflation for December is tipped to show a seven per cent rise over the past 12 months.
"Energy prices are impacting everyone's life. It's what you pay at the petrol pump," Mr Weston said.
Inflation in the US has been at the highest levels in 40 years after policymakers stimulated an economic recovery.
Mr Weston tipped life would get easier for consumers there soon.
"Are we at peak inflation? I think we are. We'll see a slow grind lower in the figures," he said.
The supply challenges of the pandemic would gradually ease, Mr Weston said, and the rate of price growth would subside.
Overnight, Federal Reserve chairman Jerome Powell said central bankers were determined to ensure high inflation did not become entrenched.
Wall Street responded well and closed higher. The Australian market followed.
The benchmark S&P/ASX200 index closed up 48.8 points, or 0.66 per cent, to 7438.9 points.
The All Ordinaries index closed higher by 51.5 points, or 0.67 per cent, to 7762.2 points.
Among the top energy shares were Beach and Woodside. Beach rose 5.34 per cent to $1.38. Woodside gained 4.1 per cent to $24.35.
Afterpay surged after US payments giant Block gained approval for its takeover from Spain's central bank.
The Spanish regulators determine on behalf of the European Union whether company purchases in some nations may go ahead.
Afterpay shares were up 4.75 per cent to $77.00. They are due to trade on the ASX for the last time on January 19.
Consumer staples, which includes big retailers hampered by supply shortages from surging virus infections, was the worst category. It lost 0.59 per cent.
Property group Irongate rejected the latest takeover offer from fund manager 360 Capital.
The suitor offered $1.72 for each stapled security it does not already own.
Irongate dropped 0.87 per cent to $1.70.
Miners were mixed. BHP improved by about one per cent to $45.12. Fortescue dropped 1.14 per cent to $20.88. Rio Tinto gained 0.85 per cent to $107.27.
Medicines developer Mesoblast revealed promising progress from patients trialling its treatment for lower back pain.
The phase three trial results showed less pain among 404 patients, who were treated three years ago.
Mesoblast will run another trial then may seek approval for the treatment in the US and Europe.
Shares were up about one and a half per cent to $1.33.
Buy now, pay later provider Openpay is ramping up efforts to crack the US market and has hired a US investment bank to advise.
In the UK, the company has shelved plans to buy UK provider Payment Assist. The two will instead be sales partners.
Money previously intended for the purchase will be invested in the US and Australian businesses.
Shares rose 25.4 per cent to 79 cents.
Banks had little movement. ANZ inched higher by 0.11 per cent to $28.03. The Commonwealth dropped 0.18 per cent to $101.58. NAB and Westpac closed even.
The Australian dollar was buying 72.17 US cents at 1717 AEDT, higher from 71.87 US cents at Tuesday's close.
ON THE ASX
* The benchmark S&P/ASX200 index closed up 48.8 points, or 0.66 per cent, to 7438.9 points on Wednesday.
* The All Ordinaries index closed higher by 51.5 points, or 0.67 per cent, to 7762.2 points.
* At 1717 AEDT, the SPI200 futures index was higher by seven points, or 0.1 per cent, at 7357 points.
One Australian dollar buys:
* 72.17 US cents, from 71.87 cents on Tuesday
* 83.23 Japanese yen, from 82.80 yen
* 63.45 Euro cents, from 63.37 cents
* 52.90 British pence, from 52.86 pence
* 106.22 NZ cents, from 106.17 cents.