Australian market set to climb as US Treasury hints at Iran Strait deal

Australian equities were on track for another positive session after Treasury Secretary Scott Bessent indicated that negotiations with Iran could produce an agreement to reopen the Strait of Hormuz as early as the next day. The prospect of de-escalation sent ASX futures up about 0.4% and lifted the local index by roughly 1.4% at the previous close. In the United States, major indices surged, with the Dow, S&P 500 and Nasdaq all achieving new record highs, driven by a steep 6% drop in Brent crude to just under $79 a barrel.

The lower oil price trimmed inflation worries and cut the probability of a September Federal Reserve rate increase. The Australian dollar responded by gaining against the US cent. Analysts cautioned that prior statements from the Trump administration have sometimes been followed by renewed tensions in the Strait.