US stocks pushed to fresh record highs on Friday, while oil prices fell more than 10%, after Iran confirmed the Strait of Hormuz is “completely open” to commercial traffic.
The move signals a major easing of one of the biggest risks markets have been pricing in over the past weeks.
The reaction across markets was quick but clear. Stocks extended gains, with the S&P 500, Nasdaq, and Dow all moving higher, while oil saw one of its sharpest declines recently as supply fears faded.
At the center of the shift is one key factor: The reopening of the Strait of Hormuz, a route that carries a large share of global oil supply
With that risk easing, investors are now pulling back from worst-case scenarios around inflation and energy shocks.
President Trump added to the optimism, saying “it’s looking very good that we’re going to make a deal with Iran,” suggesting negotiations could move forward in the coming days.
At the same time, a fragile ceasefire in the region appears to be holding for now, further supporting market confidence.
Still, not everything is moving in the same direction.
- Netflix shares dropped sharply despite beating expectations, as weak guidance disappointed investors
- Some banks reported solid results, showing underlying resilience in parts of the economy
This highlights that while markets are rising, stock-specific reactions remain selective.
The bigger picture is shifting fast. Markets have moved from war-driven fear to relief-driven optimism, with falling oil prices now supporting equities instead of pressuring them.
But the situation remains fragile. If geopolitical tensions return, both oil and stocks could reverse just as quickly.
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Related: Strait of Hormuz Reopens, Easing Global Energy Fears
