The Australian sharemarket surged after President Donald Trump signalled the US was close to a deal with Iran, fuelling hopes for an end to the war that has roiled global markets.

The Australian sharemarket is lower in early trade as fresh US strikes on Iran cast doubt on the chances of a deal to reopen the Strait of Hormuz.

Australian shares are set to rally as oil plunged and the S&P 500 leapt after President Donald Trump signalled a peace deal was near at hand. Follow live.