Donald Trump has extended his deadline for a peace deal with Iran by 10 days after mounting worries over the Middle East crisis sent Wall Street equities sliding in their worst day since the conflict began.

The US president wrote on his Truth Social platform on Thursday that at Tehran’s request he was “pausing the period of Energy Plant destruction” until April 6, claiming that talks to end the war were “ongoing” and “going very well”.

Trump’s post, which came 11 minutes after the close of share trading on Wall Street, marked the latest change in the White House’s stance in the month-old war with Iran, with the president oscillating between escalating US military action and opening up contact with Tehran to end the conflict.

The move comes as the Pentagon has ordered the deployment of thousands of additional troops to the Middle East. They could potentially be used for ground operations in Iran, which would be a sharp escalation of US involvement and probably further inflame the region.

Trump’s decision to allow further time for negotiations with Tehran suggests he may not be prepared to take that risk.

Asian stock markets opened down on Friday but reversed losses during the trading day. Japan’s Topix was up 0.4 per cent in the afternoon, while Hong Kong’s Hang Seng index was 0.8 per cent higher.

Trump’s extension to his deadline came at the end of a volatile session for financial markets on Thursday, when US stocks suffered their worst one-day decline in two months.

Wall Street’s benchmark S&P 500 fell 1.7 per cent to a six-month low. The tech-heavy Nasdaq Composite dropped 2.4 per cent, leaving it more than 10 per cent lower from its peak in late October.

Futures for the benchmark S&P 500 and Stoxx Europe 600 on Friday rose 0.4 per cent and 0.3 per cent, respectively.

Brent crude on Friday traded around $107.17 a barrel, down 0.8 per cent. The international oil benchmark a day earlier had posted its biggest rise since March 11.

Yields on 10-year US Treasuries were stable at around 4.41 per cent in early trading after seeing sharp selling pressure the previous session.

Moves this week have reflected investors’ concerns that rising fuel costs will accelerate inflation, preventing the Federal Reserve from cutting interest rates this year. Instead, an increase could be on the cards. The OECD on Thursday warned that the Middle East crisis would boost US inflation to 4.2 per cent this year, the highest in the G7.

“The market isn’t being erratic, this is what an efficient market looks like in the face of radical uncertainty,” said Steven Grey, chief investment officer at Grey Value Management, referring to Thursday’s extreme volatility across stocks, Treasuries and commodities.

“People are shifting gears incredibly fast or they’ve backed away,” he added. “The market’s confusion is entirely rational.”

Trump had originally set a deadline of March 23 for Iran to reopen the Strait of Hormuz, the vital waterway for Gulf energy exports that has in effect been closed since the conflict began.

He first extended it on Monday to March 27 in a Truth Social post citing “VERY GOOD AND PRODUCTIVE CONVERSATIONS REGARDING A COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES”.

Since then, Trump has instructed senior US officials — including vice-president JD Vance, secretary of state Marco Rubio, special envoy Steve Witkoff and Jared Kushner — to try to forge a deal with Iran, sending Tehran a 15-point plan through mediators in Pakistan.

Iranian officials have denied they are directly negotiating a peace deal, but say they have been in contact with third countries seeking a resolution.

The US has about 50,000 troops in the Middle East and has struck more than 10,000 targets since starting its war against Iran.

About 10,000 additional US troops and five warships are en route to the region. The additional forces — including about 4,400 marines and thousands of elite army paratroopers — are trained to seize and hold land.