Wall Street Rips Higher as Oil Fears Ease and Hormuz Reopens – for Now

CNBC, the Wall Street Journal, and Market Watch contributed to this report.

Markets didn’t just bounce – they launched.

Stocks surged Friday after Iran said the Strait of Hormuz was “completely open” again, at least for the duration of a fragile ceasefire tied to fighting between Israel and Lebanon. Investors, primed for any hint of relief, piled back in.

The Dow Jones Industrial Average jumped more than 1,100 points, a 2.3% gain that erased days of anxiety in a single session. The S&P 500 pushed past 7,100 for the first time ever, while the Nasdaq Composite climbed to fresh highs of its own. Even smaller companies joined the party, with the Russell 2000 hitting a record.

The spark came from Tehran. Foreign Minister Seyed Abbas Araghchi said commercial vessels could once again pass through the chokepoint, a crucial artery for global oil flows. The announcement followed a 10-day ceasefire touted by Donald Trump, who’s been signaling the broader conflict could wind down soon.

Oil markets reacted instantly. US crude slid hard – down about 14% – while Brent crude dropped roughly 10%. Prices are still elevated, but the panic premium that had been building for weeks suddenly deflated.

That shift rippled across equities. Airlines, cruise operators, anything tied to travel or fuel costs – everything moved higher. Boeing gained ground. Royal Caribbean surged. Even consumer-heavy names like Amazon and Airbnb caught a lift as recession fears eased, at least for the moment.

Investors are already looking past the conflict’s worst-case scenarios. The thinking is simple: if oil keeps flowing, the global economy keeps moving. That assumption – fragile as it is – was enough to drive indexes to records.

Still, there’s a catch. The reopening isn’t permanent. Ships are being routed along paths set by Iran, and the arrangement only lasts as long as the ceasefire holds. Any breakdown in negotiations could send oil – and volatility – right back up.

Some strategists aren’t convinced this rally has solid footing. Stocks have gone from oversold to overheated in less than two weeks, a move that looks impressive on the surface but leaves little margin for error underneath. Oil is still hovering near levels that strain businesses and consumers. Earnings season is just getting started. And the geopolitical story isn’t finished.

For now, though, markets are choosing optimism. The war looks closer to a pause. Energy flows are loosening. And after weeks of tension, traders finally have something they’ve been waiting for: a reason to buy again.