Australian shares closed the week higher, tracking Wall Street markets, as a Federal Reserve Governor backed a 25 basis point cut in the next two weeks.

The S&P/ASX 200 Index rose 1.37% or 118.2 points to close at 8,757.2, and earlier hit a record high.

Federal Reserve Governor Christopher Waller said it interest rates should be cut before the labor market shows further signs of deterioration, Bloomberg reported.

"If you wait until the labor market deteriorates, you're too late. It's over," Waller said, as quoted in the report.

On the domestic front, business confidence in Australia lifted in the second quarter despite softer conditions, weaker employment, and ongoing pressure on profitability, according to a survey by the National Australia Bank (ASX:NAB).

In company news, BHP Group (ASX:BHP) reported copper production of 516,200 tonnes in the fourth quarter of fiscal 2025, up 2% year on year and 1% sequentially. Shares of the company rose past 3% at market close.

Mesoblast (ASX:MSB) reported $13.2 million in unaudited gross revenue from sales of its Ryoncil mesenchymal stromal cell product in the June quarter after its launch on March 28. Shares of the company rose past 34% at market close.

Lastly, Shares of Virgin Australia Holdings (ASX:NHF) rose nearly 2% at market close after receiving a buy rating and a AU$3.90 price target from UBS.