ASX edges higher, oil dives on hopes of Iran deal

Summary

ASX edges higher, oil dives on hopes of Iran deal Updated ,first published The Australian sharemarket has advanced at the open while oil prices have slumped on rising hopes of an end to the Middle East conflict, although US President Donald Trump said he had told his representatives not to rush into any deal with Iran. The S&P/ASX 200 was up 6.7 points, or 0.1 per cent, to 8663.70 in early trade. Crude oil fell 5 per cent to the lowest level in more than two weeks, and the US dollar weakened on expectations that a deal to reopen the Strait of Hormuz and restore oil flows may be near. Senior US officials said that the US and Iran were nearing a deal, though negotiations over key language were continuing and final approval from both sides could still take several days. Trump wrote on Truth Social that the US will not rush to reach an agreement. The US blockade on Iranian ships on the Strait of Hormuz would “remain in full force and effect until an agreement is reached, certified, and signed,” he wrote. A day earlier, Trump said Washington and Iran had “largely negotiated” a memorandum of understanding on a peace deal that would reopen the Strait of Hormuz, which before the conflict carried one-fifth of global oil and liquefied natural gas shipments. Trump has repeatedly played up the prospect of an agreement to end the war that the US and Israel started on February 28. “Upside momentum looks set to extend,” IG analyst Tony Sycamore wrote in a note to clients. While any deal could still collapse, “financial markets appear to be, at this point, giving the reports the benefit of the doubt.” Energy stocks fell in early trade on the back of falling crude prices. Woodside Energy lost 3.1 per cent and Santos 2.6 per cent. Refiners Ampol and Viva Energy lost 1.7 per cent and 2 per cent, respectively. Kerry Stokes’ Beach Energy was 2.2 per cent lower after announcing it has sold a 50 per cent interest in an offshore gas field in the Victorian Otway basin to rival producer Amplitude Energy, which is racing to bring more gas to the southern market. Mining stocks are higher, with BHP up 0.2 per cent while Rio Tinto added 0.5 per cent. Fortescue was up 0.1 per cent, with the company announcing former chief executive and executive director Elizabeth Gaines would exit the board on June 30. Gold miners jumped as the price of the precious metal advanced with the expectation that a deal to reopen the Strait of Hormuz will ease inflationary pressures. Northern Star was up 5.2 per cent and Evolution Mining added 2.5 per cent in early trade. Financial stocks are weaker, with Commonwealth Bank and ANZ Bank each shedding 0.5 per cent while National Australia Bank lost 0.2 per cent and Westpac 0.3 per cent. Technology stocks are stronger with WiseTech up 1.4 per cent, Xero rising 0.6 per cent, Technology One advancing 1.3 per cent and NEXTDC inching 0.1 per cent higher. Guzman y Gomez was up 1 per cent. The fast food chain is facing a class action claim in the US for allegedly failing to give workers enough notice when it abruptly shut down its American operations and pulled the pin on its dreams to conquer the world’s biggest fast food market. Chicago-based law firm Haseeb Legal filed the complaint to a US federal trial court in Illinois on Sunday, claiming the Australian-founded burrito maker did not give the mandatory 60 days’ notice after accidentally leaking the news on an internal work platform. The Australian dollar jumped on the back of weakness for the US greenback. The Aussie was trading at US71.57¢ at 10.18am AEST. On Friday, the split between Wall Street and most US households grew wider as US stocks rose to the finish of their eighth straight winning week, the best such streak since 2023. That’s even though a survey showed US consumers are feeling even worse about the economy. The S&P 500 added 0.4 per cent and pulled closer to its all-time high set in the middle of last week. The Dow Jones rose 294 points, or 0.6 per cent, and the Nasdaq composite gained 0.2 per cent. On Wall Street, Estee Lauder jumped 11.9 per cent after saying it was no longer considering a possible merger with Puig, the Spanish fragrance and beauty products company. Workday rose 5.2 per cent, and Zoom Communications jumped 9.2 per cent after both delivered better profit reports for the latest quarter than analysts expected. They’re the latest companies to top analysts’ expectations for earnings for the start of 2026, and the cavalcade of such reports has helped US stocks remain near their records. Stock prices tend to follow the path of corporate profits over the long term. The strength is coming even after a survey of US consumers by the University of Michigan found sentiment fell to a record low, piercing below a bottom in 2022 when inflation peaked above 9 per cent. Households are feeling worried about how bad inflation is now because of expensive oil created by the war with Iran. The yield on the 10-year Treasury edged down to 4.56 per cent, but it remains well above its 3.97 per cent level from before the war. Worries about inflation have climbed so high that traders on Wall Street have eliminated bets that the Federal Reserve will resume its cuts to interest rates later this year. Lower rates would give the economy a boost, but they could also worsen inflation. An important member of the Fed, Governor Christopher Waller, said in a speech: “If I believe inflation expectations start to become unanchored, I would not hesitate to support an increase in the target range for the federal funds rate.” But he also said that is not the case now in his speech titled “Policy Risks Have Changed.” Instead, he said it “is time to simply sit and watch how the conflict and the data evolve.” With AP, Bloomberg, Reuters The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon. More: