Staff writers
The Australian sharemarket is set for an uncertain start to the week amid an escalation of tensions in the Middle East.
Shares rose on Wall Street on Friday in New York and oil prices plunged after Iran said the Strait of Hormuz was open again for commercial tankers carrying crude from the Persian Gulf to customers worldwide, but the crucial waterway was closed again on Sunday (AEST).
The Islamic Revolutionary Guards Corps (IRGC) announced that it would prevent ships passing through the Strait of Hormuz while a US blockade on Iranian ports remains in place, a move Iran says violates the terms of a ceasefire agreement. US president Donald Trump then threatened strikes on Iranian power plants and bridges overnight if a deal is not reached this week.
It sets the stage for a volatile start to trade on the ASX on Monday morning.
Before the latest developments, Wall Street’s S&P 500 leaped 1.2 per cent to an all-time high and closed out a third straight week of big gains, its longest streak since Halloween. The Dow Jones Industrial Average surged as many as 1100 points before paring its gain to 868, or 1.8 per cent. The Nasdaq composite climbed 1.5 per cent.
Oil prices closed sharply lower on Saturday before the latest developments with Brent, the international benchmark, shedding 9.1 per cent while US oil tumbled 11.5 per cent. Oil will resume trading this morning.
Several times since the war began, optimism on Wall Street has quickly deteriorated into doubt about a possible end to the fighting. That in turn has caused vicious and sudden swings of prices for everything from stocks to bonds to oil.
A strong start to the earnings reporting season for big US companies has also helped support the US stock market, and more financial companies joined the list delivering bigger profits for the start of 2026 than analysts expected.
State Street rose 2.5 per cent, and Fifth Third Bancorp added 1.7 per cent after both reported better results for the latest quarter than expected.
They helped offset a 9.7 per cent slide for Netflix, which fell even though it delivered a better profit than expected. It did not raise its forecast for revenue growth for the full year, which analysts said may have disappointed some investors.
It also said Reed Hastings, cofounder and chairman of the streaming company, will step down from its board of directors in June when his term expires.
with AP, Bloomberg
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