U.S. Stocks Hit Record Highs and Oil Prices Plunge as Iran Reopens Strait of Hormuz
U.S. financial markets surged Friday on optimism that a seven-week war involving Iran could be ending soon, with Iran announcing the reopening of the Strait of Hormuz, a critical waterway through which roughly one-fifth of the world's oil passes. The announcement sent stock indexes to record levels while simultaneously pushing oil prices down more than 10%, reflecting investor relief that global energy supplies would no longer face disruption from the conflict.
The S&P 500 climbed 1.2% to close above its January record high, extending a five-day winning streak, while the Dow Jones Industrial Average jumped 1.8%. The Nasdaq 100 achieved its longest winning streak since 2013, and smaller-cap stocks also participated in the rally, with the Russell 2000 surging 2.1% to reach record highs. Transportation stocks, typically sensitive to energy costs and economic conditions, climbed 3% to record levels as well. President Donald Trump amplified market sentiment by announcing through social media that the Strait had been reopened and suggesting a deal to end the conflict could be finalized soon.
The month-long rally that accelerated Friday has been remarkably swift. Since ceasefire talks emerged last week, markets have recovered losses in what analysts described as one of the quickest recoveries following a major market contraction. Beyond stocks, the rally has extended across multiple asset classes—Bitcoin added roughly $12,000 to its price, while credit and gold markets also moved higher as investors embraced riskier positions.
However, the path forward remains uncertain. Iran stated through state media that the Strait will remain closed if the U.S. naval blockade continues, while President Trump indicated the blockade will end only when a deal is reached. Talks are reportedly scheduled to resume this weekend, leaving investors with a degree of caution despite the celebratory tone of Friday's trading. Oil prices, while down sharply from recent highs, remain elevated as markets wait for concrete evidence of a resolution.