Stocks slide as Trump vows to keep hitting Iran

Markets recoiled on Thursday as war jitters over Iran deepened, with stocks sliding, oil surging and the dollar firming after US President Donald Trump dashed hopes for clarity on when the Middle East conflict might end.

Trump said in a prime-time address that the United States would hit Iran "extremely hard" within weeks, claiming military goals were nearly achieved and the conflict was close to ending.

"We have no additional certainty or clarity around timeline from this address and this is what the market was looking for," said Jon Withaar, senior portfolio manager at Pictet Asset Management in Singapore.

"The fact that we can expect two to three more weeks of action, boots on the ground were not ruled out and that threats to hit infrastructure were reiterated will put the market back on the defensive, particularly as we come into the long weekend."

The prospect of the end to the month-long US-Israeli war with Iran lifted global stocks and knocked the dollar off its recent highs in the past two sessions after a brutal March where soaring oil prices sent risk assets into a tailspin.

In the immediate aftermath of the speech, however, investors were back to selling almost everything except the US dollar and sending oil prices higher.

US stock futures slid 1.0 per cent while European futures sank over 1.5 per cent. Asian stocks were clobbered, with Japan's Nikkei down 1.8 per cent and South Korea's Kospi index sliding 3.6 per cent.

MSCI's broadest index of Asia-Pacific shares outside Japan was down over 1.5 per cent, with almost all bourses in Asia in the red.

The front-month Brent contract for June rose about 5.0 per cent to $US106.16 ($A154.24) per barrel after investors found little reassurance in the speech, which failed to spell out when or how the Strait of Hormuz - a critical fuel shipping route - would reopen to ease supply disruptions hitting Asia hard.

"The only thing that really matters is whether the Strait of Hormuz will open soon. Trump's speech doesn't imply this is likely to happen as quickly as the markets were expecting," said Prashan Newnaha, senior rates strategist at TD Securities.

Trump said the United States does not need the key oil gateway and that it will open naturally once the conflict is over.

Iran has fired repeatedly on Gulf countries, some of which are home to US bases, and is using the strait as leverage.

"His comments on the duration of other wars was notable, in that even if the war with Iran lasts a few months, it's not as long as prior wars," said Newnaha.

"Expect USD and oil to move higher while risk is shed."

Trump's comments also rekindled concerns over stagflation, the toxic mix of high inflation and weak growth that roiled markets in March.

The US dollar has been the haven of choice among investors during the tumult and the greenback rose against most currencies following the speech. The euro weakened 0.25 per cent to $US1.156 ($A1.680).

The dollar index, which measures the US currency against six other units, was 0.3 per cent higher at 99.858 after dropping nearly 1.0 per cent in the past two days on optimism of an end to the war soon.