Staff writersUpdated May 26, 2026 — 11:25am,first published May 26, 2026 — 5:15amThe Australian sharemarket opened lower after the US military said it carried out “self-defence” strikes in southern Iran, triggering doubts about an imminent end to the war just hours after President Donald Trump had suggested peace talks with Tehran were progressing.The S&P/ASX 200 was down 56.4 points, or 0.7 per cent, to 8635.60 just before 11am AEST, with banks and property trusts leading the losses. The downturn came after the ASX rose 0.4 per cent on Monday as hopes for a deal to end the US-Iran war had bolstered investor confidence and pushed down oil prices. The Australian dollar edged down 0.1 per cent to US71.68¢ in early trade.Wall Street and a number of other global markets were closed overnight.Getty ImagesThe latest strikes, which included attacks on Iranian missile launch sites and boats placing mines, were done “to protect our troops from threats posed by Iranian forces,” but the military was “using restraint during the ongoing ceasefire,” a US military spokesman said in a statement.The US-Israeli attack took place south of Larak Island in the Strait of Hormuz, with several Iranian personnel killed, Iran’s state-run Nour News reported, without providing further details. Trump had earlier said negotiations with Iran over an agreement to extend their ceasefire and reopen the strait were “proceeding nicely.”The renewed fighting highlights the fragile nature of the existing ceasefire, just as expectations had been mounting of a longer truce and the reopening of the strait. The critical waterway has been all but closed since the US and Israel attacked the Islamic Republic in late February, triggering an energy shock and spurring a wave of global inflation.Global stocks rose to record highs overnight and crude oil fell after officials signalled the US and Iran were nearing a deal to reopen the strait and restore oil flows. Brent crude turned higher again after the reports of the latest skirmishes this morning, rising 1.6 per cent to $US97.68 a barrel.Energy stocks were mixed after oil’s slump on Monday, which pushed WTI crude down more than 6 per cent to around $US90 a barrel amid optimism about an imminent peace deal, and the uptick in oil prices again this morning. Oil and gas giant Woodside was down 0.8 per cent, its rival Santos was up 0.5 per cent, while refiner Ampol was down 1 per cent and Viva Energy was flat.Banks led the market’s declines in early trade. CBA was down 1 per cent, Westpac lost 1.2 per cent, while Westpac fell 1.8 per cent and ANZ Bank shed 0.9 per cent.Real estate investment trusts were led lower by the ASX’s biggest property stock, Goodman Group, which slumped 4.2 per cent after a third-quarter trading update. The company said it was on track to deliver “at least” its target of 9 per cent operating EPS growth this year as it repositioned its asset holdings towards large infrastructure-scale industrial properties and AI data centres.Energy availability was the most significant constraint on delivering the infrastructure needed to power the digital economy, Goodman said, and warned the scale of data centre investment required to meet customer demand is likely to exceed the current funding capacity of global capital markets.Bucking the trend, Kogan shares jumped 16.9 per cent after the online retailer said its earnings jumped 25.4 per cent to $26.9 million in the 10 months to April 30 as its Mighty Ape business turned around and Kogan.com showed strong profitability.The overall market losses on the ASX in early trade came as futures contracts on the S&P 500 were up 0.7 per cent, while those on the Nasdaq 100 were up 0.9 per cent. Wall Street was shut overnight for the Memorial Day holiday.The hopes of an end to the war, which is weighing heavily on the global economy, had spurred markets around the world overnight. The MSCI All Country World Index, the broadest measure of global equities, rose 0.5 per cent to an all-time high closing level. Europe’s benchmark Stoxx 600 gained for a sixth straight session to close at the highest level since the outbreak of the war. Trading volumes were light, with some markets including the UK, Switzerland, Norway and Denmark closed for holidays.The improvement in risk sentiment followed weeks of stalemate between the US and Iran after several previous efforts to strike a deal.“A clear FOMO factor contributes to unexpectedly strong global risk appetite: investors don’t want to be left out if the Iran war comes to an end while the AI theme continues to lift the stock market,” said Dana Malas, a strategist at SEB.Italy’s benchmark equity index rose past its all-time closing high set in 2000, with a recent rally in energy and chip stocks supercharging it to record levels. Among individual stock moves in Europe, Delivery Hero jumped more than 10 per cent after it received a takeover offer from Uber Technologies in a deal that would value the German delivery company at about €10 billion ($16.2 billion).Traders remain focused on inflation. They have fully priced in a Federal Reserve rate hike by year-end, underscoring expectations that the US central bank chair Kevin Warsh will need to act swiftly. Later this week, US Personal Consumption Expenditures data and inflation readings across Europe will offer clues on price pressures and the direction of interest rates.Warsh, who has promised the biggest shakeup in decades at the US central bank, was sworn into office on Friday. Trump stressed that he wants Warsh to independently lead the Fed, as he looked to downplay investor concern that he would pressure the new central bank chief on policy decisions.The Fed may have enough reason to justify an interest rate cut rather than a hike under new chairman Warsh, according to BlackRock.Elsewhere, China launched an unprecedented campaign against illegal cross-border trading to stem capital outflows, threatening severe penalties against popular brokers and ordering non-compliant accounts to be liquidated within two years.with AP, BloombergThe Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.From our partners