U.S. stocks raced to another record and oil prices dropped Friday after Iran announced the Strait of Hormuz is open again for commercial tankers carrying crude from the Persian Gulf to customers worldwide.
The S&P 500 leaped 1.2% to an all-time high of 7,126.06, closing out a third straight week of big gains and marking its longest streak since Halloween. The Dow Jones Industrial Average surged as many as 1,100 points before settling for a gain of 868.71 points, or 1.8%, to close at 49,447.43. The Nasdaq composite climbed 1.5%, adding 365.78 points to reach 24,468.48.
▶️ WATCH: MSU Denver professor weighs in as stocks rally
The U.S. stock market has jumped more than 12% since hitting a bottom in late March on hopes the United States and Iran can avoid a worst-case scenario for the global economy despite their war.
When asked if the market is out of the woods from Iran-based instability or if Friday was just a good day, Robert Persichitte, a professor at MSU Denver, weighed in on the uncertainty.
"The easiest answer always is we don't know," Persichitte said. "And there's always going to be two components to any question like that. One, what's going to happen in the future? And number two, how's the market going to react."
The price for a barrel of benchmark U.S. crude plunged 9.4% to settle at $82.59 immediately after Iran's foreign minister, Abbas Araghchi, posted on X that passage for all commercial vessels through the strait "is declared completely open."
Araghchi said a ceasefire appears to be holding in Lebanon and said the strait would stay open for the remaining period of the ceasefire. Brent crude, the international standard, fell 9.1% to settle at $90.38 per barrel. It remains above its $70 price from before the war, indicating some caution is still embedded in financial markets.
President Donald Trump said late Thursday that the war "should be ending pretty soon." Minutes after the Iranian foreign minister's announcement, Trump said on his social media network that the U.S. Navy's blockade of Iranian ports remains "in full force" until both sides reach a deal on the war.
"Should go very quickly in that most of the points are already negotiated," Trump said.
A freer flow of oil could take pressure off prices for gasoline, groceries, and other products. It could also ultimately help people pay less on credit-card interest and mortgage bills. With less threat of high inflation hurting the economy, a sustained drop in oil prices could convince the Federal Reserve to resume its cuts to interest rates. The yield on the 10-year Treasury sank to 4.24% from 4.32% late Thursday.
Companies with big fuel bills soared to some of Wall Street's biggest gains following the easing of oil prices. United Airlines flew 7.1% higher, and Southwest Airlines climbed 5.1%. A day earlier, the head of the International Energy Agency said Europe has "maybe six weeks or so" of remaining jet fuel supplies.
Operators of cruise ships also steamed higher. Royal Caribbean Group gained 7.3%, and Carnival rose 7%.
Housing and auto-related companies likewise got some relief. Builders FirstSource rose 5.5%, and homebuilder PulteGroup gained 5% on hopes that lower mortgage rates will spur more people to buy houses. Carvana climbed 7% because lower loan rates can get more customers into new autos.
A strong start to the earnings reporting season for big U.S. companies has also helped support the market. State Street rose 2.5%, and Fifth Third Bancorp added 1.7% after both reported better results for the latest quarter than expected.
They helped offset a 9.7% slide for Netflix, which fell even though it delivered a better profit than expected. The company did not raise its forecast for revenue growth for the full year. Netflix also said Reed Hastings, cofounder and chairman of the streaming company, will step down from its board of directors in June when his term expires.
In stock markets abroad, indexes leaped in Europe following Iran's announcement. France's CAC 40 jumped 2%, and Germany's DAX returned 2.3%. In Asia, where trading finished for the day before the announcement, indexes were weaker. Japan's Nikkei 225 lost 1.8%, and Hong Kong's Hang Seng fell 0.9%.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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