Stan Choe
The Australian sharemarket is set for an uncertain start to the session as US President Donald Trump said he had told his representatives not to rush into any deal with Iran, appearing to dampen hopes of an imminent breakthrough in the three-month-old war that had been raised by both sides a day earlier.
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”, Trump wrote on Truth Social.
Negotiations were progressing and the US relationship with Iran had become more professional and productive, he said. But he added: “Both sides must take their time and get it right. There can be no mistakes!”
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.
On Friday, the split between Wall Street and most US households grew wider Friday 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.
The Australian sharemarket is set for an uncertain open, with futures, which were set on Saturday before the latest Middle East developments, pointing to a fall of 58 points, or 0.7 per cent, at the open. The Australian dollar was trading at US71.59¢ at 5.14am AEST.
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.
US consumers are forecasting inflation will worsen to 4.8 per cent in the coming 12 months, up from a forecast of 4.7 per cent last month, according to the survey. In the longer run, their forecasts for inflation jumped to 3.9 per cent from 3.5 per cent last month. Such rising expectations are a concern for economists because they can drive behaviour that creates a vicious cycle that makes inflation worse.
Sentiment dropped in particular for lower-income consumers who are least able to absorb higher costs for essentials, and it fell for Republicans as well, according to the survey.
Helping to keep uncertainty high have been continued swings for oil prices. They yo-yoed again Friday, like they did through the week on uncertainty about when the United States and Iran may find a deal to reopen the Strait of Hormuz. The closure has prevented oil tankers from exiting the Persian Gulf and delivering crude to customers worldwide.
The price for a barrel of Brent crude oil to be delivered in August added 0.7 per cent to settle at $US100.21 after erasing an earlier decline.
The yield on the 10-year Treasury edged down to 4.56 per cent from 4.57 per cent late Thursday, 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 Friday, “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.”
AP, Reuters
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Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: www.smh.com.au
