Australia’s sharemarket has bounced back as investors seized on fresh signals from US President Donald trump that the Iran conflict may end soon.

The S&P/ASX 200 Index rose 1.1 per cent, or 96.50 points to 8695.50 at 2.05pm on Tuesday.

The powerful rebound corrected much of Monday’s $90billion wipeout, which had been triggered by escalating Middle East turmoil and rising fears over what a prolonged conflict could mean for the global economy.

Trump injected a jolt of optimism into rattled markets after revealing the United States was ‘very far’ ahead of its original four‑to‑five‑week military timeline in Iran, comments that traders immediately interpreted as a potential turning point. 

He then went further, hinting the conflict was ‘close to ending,’ sending a wave of relief across global trading floors.

‘We’re achieving major strides toward completing our military objective,’ Trump declared at a Monday press conference.

‘We could call it a tremendous success right now… Or we could go further, and we’re going to go further.’

The president also attempted to calm one of the market’s biggest pressure points.

Oil prices dropped sharply after Donald Trump (pictured) signalled an end to the Iran conflict

‘We’re looking to keep the oil prices down,’ he told reporters. 

Wall Street reacted instantly. 

US markets, which had plunged early in the session as oil soared and fears of a wider regional conflict intensified, staged a stunning late‑day comeback once Trump’s comments broke. 

The S&P 500 jumped 0.83 per cent, the Nasdaq leapt 1.38 per cent, and the Dow Jones added 0.51 per cent by the closing bell.

Oil remained the main source of global jitters. Crude briefly rocketed to USD$120 a barrel, its highest level since mid‑2022, as shipping lanes remained disrupted and the Iran conflict entered its tenth day. 

Prices later eased back below USD$90, but analysts warn the risk of another inflation shock is growing, especially as households worldwide continue battling rising costs.

But Iran hit back swiftly. 

The Islamic Revolutionary Guard Corps rejected Trump’s upbeat assessment, insisting Washington had no power to dictate the outcome of the war.

The ASX has rebounded this morning, making up some of the losses from Monday’s sell off

‘We are the ones that will determine the end of the war,’ an IRGC spokesperson told state media, dismissing Trump’s remarks as ‘nonsense.’

Posting on Truth Social on Tuesday, Trump warned that Iran would have ‘death, fire and fury’ brought upon them if they blocked oil supplies. 

‘If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far,’ he said. 

‘Additionally, we will take out easily destroyable targets that will make it virtually impossible for Iran to ever be built back, as a Nation, again — Death, Fire, and Fury will reign upon them — But I hope, and pray, that it does not happen!’ 

Early US futures point to a weaker session ahead, signalling Wall Street may struggle to hold onto its overnight gains.