Shares sink, oil jumps as Trump warns on extended Iran war

Australian shares turned lower and oil jumped on Thursday lunchtime after US President Trump warned its war on Iran will last another two to three weeks and may include bombing of the nation’s oil infrastructure.

The S&P/ASX 200 traded up 0.2 per cent immediately prior to the speech at 8700 points but quickly dropped 67 points to a 0.4 per cent fall on the threats that dashed the market’s hopes of an imminent peace deal.

Ahead of the Easter Holiday weekend the market eventually closed down 1.1 per cent at 8579 points, after sellers dumped stocks on worries the US may launch a land invasion of Iran’s islands or mainland over the Easter weekend.

Benchmark Brent Crude prices also jumped 3 per cent after Trump’s speech to $US104.91 a barrel, with US WTI Oil adding a similar amount to $US103.41 a barrel.

“In the end, Trump’s much-anticipated national primetime address disappointed as it contained nothing new,” said AMP economist My Bui. “Core US goals are ‘nearing completion’, the US will hit Iran’s electric plans if there is no deal, and in fact the speech skewed to higher escalation risks as Trump threatened to hit Iran “extremely hard” over the next two to three weeks.”

Wall Street’s share futures also swung sharply lower after the speech to point to a 1.5 per cent fall for the tech heavy Nasdaq Index at the open, versus expectation for a 0.1 per cent gain prior to the speech.

In the highly-anticipated speech the US President also suggested that stock markets had not fallen as much as he expected and claimed they would soon come roaring back in line with the US economy, like never before.

“I can say tonight we’re on track to complete all of America’s military objectives very shortly, we’re going to hit them very hard over the next two to three weeks and bring them back to the stone age,” President Trump said.

Tech stocks resume slump

The threats particularly affected local technology sector that jumped on Wednesday in anticipation of a ceasefire before diving 3.9 per cent on Thursday afternoon. The tech sector is now down 11 per cent over the past month and has lost more than half its value since peaking in October 2025.

Traders also dumped precious metal gold after the speech as it fell from $US4781 an ounce to $US4670 an ounce at the closing bell in Australia. The Australian dollar also dropped from buying $US69.5 cents before the speech to $US68.5 cents afterwards.

“Financial markets were taken on a roller coaster ride this week,” said Ms Bui. “We will see a lot more noise and rhetoric around the war coming up, and it is well conceivable that we can see a 15 per cent peak to trough fall in shares this year.”

The economist added that share traders and investors in other asset classes will scour data points for signs the Middle East conflict is not worsening and the energy supply shock from the Strait of Hormuz’s closure may eventually ease.

“The only number that matters is the count of vessels passing through the Strait of Hormuz,” said Ms Bui.

“Over the last week, 11 ships have gone through which is a big improvement from zero back in mid-March, but most of them are not oil tankers and it is estimated that oil supply remains around 5 per cent to 10 per cent below the pre-war levels. “

On Thursday the best-performing sector on the S&P/ASX 200 was consumer staples. Supermarkets group Coles added 2.6 per cent to $22.62, with Woolworths up 1.3 per cent to $37.01.

On Wednesday broker Morgan Stanley issued a report stating expected food price inflation from the Middle East war is likely to lead food shoppers to trade down to cheaper private-label supermarket products and cut back on dining at restaurants.