Oil prices tumbled sharply and U.S. stocks surged to record highs on Friday after Iran announced that the Strait of Hormuz had reopened to commercial oil shipments.
In New York, crude prices fell back to levels seen at the start of the Iran conflict, easing concerns over global supply. At the same time, Wall Street rallied strongly, with the S&P 500 rising 1.2% to a new all-time high, marking its third consecutive week of solid gains.
The Dow Jones Industrial Average jumped as much as 1,100 points before settling up 868 points (1.8%), while the Nasdaq Composite advanced 1.5%. The market has rebounded more than 12% since late March, driven by hopes that the U.S. and Iran can avoid a severe economic fallout.
Iran’s move to reopen the vital oil route—responsible for transporting a significant share of global crude—boosted optimism, although the reopening may be temporary. President Donald Trump also signaled that the conflict could end soon, further lifting investor confidence.
Following the announcement, U.S. crude dropped 9.4% to $82.59 per barrel, while Brent crude fell 9.1% to $90.38. Despite the decline, prices remain higher than pre-war levels, reflecting ongoing uncertainty in the markets.
However, sentiment remained fragile. Shortly after Iran’s statement, Trump clarified that the U.S. naval blockade on Iranian ports would continue until a full agreement is reached, even as he suggested a deal could come quickly.
Lower oil prices fueled gains in sectors heavily dependent on fuel. Airline stocks rose sharply, with United Airlines and Southwest Airlines posting strong gains. Cruise operators such as Royal Caribbean and Carnival also climbed significantly.
Other industries, including housing and automotive, benefited from expectations that easing energy costs could reduce inflation and lead to lower interest rates. Treasury yields declined, raising hopes for cheaper mortgages and loans, which in turn boosted homebuilders and car-related companies.
A strong start to the corporate earnings season also supported the rally, with several financial firms reporting better-than-expected results. However, Netflix shares dropped nearly 10% despite solid profits, as investors were disappointed by its unchanged revenue outlook.
Globally, European markets also posted strong gains following the news, while Asian markets, which had closed before the announcement, ended lower.
Overall, the reopening of the Strait of Hormuz has lifted market sentiment, though uncertainty around the conflict and ongoing negotiations continues to influence investor behavior.