Oil prices plunged and U.S. stock markets rallied to record highs on Friday after Iran announced the reopening of the Strait of Hormuz to commercial oil shipments, easing fears of a major global supply disruption.
Crude prices dropped sharply in New York, retreating to levels seen at the start of the Iran conflict. At the same time, Wall Street surged, with the S&P 500 rising 1.2 percent to a new all-time high, marking its third consecutive week of strong gains.
The Dow Jones Industrial Average jumped as much as 1,100 points before closing up 868 points, or 1.8 percent, while the Nasdaq Composite gained 1.5 percent. Overall, the market has rebounded more than 12 percent since late March, driven by optimism that the United States and Iran may avoid a deeper economic fallout.
Investor confidence was further boosted by the reopening of the Strait of Hormuz, a critical global oil transit route. However, analysts cautioned that the move could be temporary, keeping uncertainty in play.
U.S. President Donald Trump signaled that the conflict could end soon, adding to the positive sentiment. Still, he later clarified that the U.S. naval blockade on Iranian ports would remain in place until a comprehensive agreement is reached.
Following the announcement, U.S. crude fell 9.4 percent to $82.59 per barrel, while Brent crude declined 9.1 percent to $90.38. Despite the steep drop, prices remain above pre-conflict levels, reflecting lingering geopolitical risks.
Lower oil prices lifted sectors sensitive to fuel costs. Airline stocks rose sharply, with United Airlines and Southwest Airlines posting notable gains. Cruise operators, including Royal Caribbean and Carnival, also advanced.
Other sectors such as housing and automotive benefited from expectations that lower energy costs could ease inflation and potentially lead to reduced interest rates. Treasury yields declined, boosting prospects for cheaper mortgages and loans and supporting gains in homebuilders and auto-related companies.
A strong start to the corporate earnings season added momentum to the rally, with several financial firms reporting better-than-expected results. However, Netflix shares fell nearly 10 percent despite solid profits, as investors reacted negatively to its unchanged revenue outlook.
Globally, European markets also advanced following the development, while Asian markets—having closed before the announcement—ended the day lower.
While the reopening of the Strait of Hormuz has improved market sentiment, uncertainty surrounding the conflict and ongoing negotiations continues to shape investor outlook.
Bd-Pratidin English/ Jisan
