Australian shares are set to drop on Thursday as the major Wall Street indices reached new records on fractional gains.

Overnight, the S&P 500 and the Nasdaq Composite rose just 0.02% and 0.1%, respectively, reaching new record highs, while the Dow Jones Industrial Average rose 0.4%.

Brent crude oil futures traded under $95 per barrel as investors await developments around a potential US-Iran peace deal.

In the macroeconomy, Australia's consumer price index rose 4.2% in the 12 months to April, down from a 4.6% increase in the year to March, the Australian Bureau of Statistics reported Wednesday. Trimmed mean inflation came in at 3.4% in the 12 months to April, up from 3.3% in the year to March.

The monthly household spending indicator data is expected to be released at 9:30 am Sydney time.

In corporate news, HealthCo Healthcare and Wellness REIT (ASX:HCW) said the Unlisted Healthcare Fund and troubled hospital operator Healthscope reached an agreement with Bethesda Health Care for the Mount Private Hospital in Western Australia.

Shape Australia (ASX:SHA) agreed to acquire Australian Professional Shopfitters from Handa Manufacturing for up to AU$29.4 million.

Forrestania Resources (ASX:FRS) identified high-grade gold mineralization during a recent drilling at its Lady Lila gold project in Western Australia. The results were up to 21 meters at 2.5 grams per tonne gold from 21 meters, including one meter at 15.9 grams per tonne gold from 21 meters.

Australia's benchmark S&P/ASX 200 Index increased by 0.7%, or 59.9 points, to close at 8,717.70 on Wednesday.