Oil prices fell more than 10% on Friday, while Wall Street headed for a new record after Iran announced that the Strait of Hormuz was fully open, allowing tankers to leave the Persian Gulf again and deliver crude to their customers around the world.
The S&P 500 climbed 0.8% as U.S. stocks were poised to close out a third straight week of significant gains, their longest such streak since Halloween. At 9:35 a.m. Eastern Time, the Dow Jones Industrial Average was up 678 points, or 1.4%, and the Nasdaq Composite Index was up 1%.
Stocks have surged more than 11% since their late March lows, buoyed by hopes that the US and Iran can avert the worst-case scenario for the global economy despite their conflict. The reopening of the Strait of Hormuz is the clearest sign of optimism so far, and President Donald Trump said in a speech Thursday night that the war "should end very soon."
The price of a barrel of benchmark US crude fell by 10.8% to $81.28.
Brent crude, the international benchmark, fell 10.3% to $89.13. Admittedly, it remains above the pre-war level of $70, indicating that a certain degree of caution persists in the financial markets.
On several occasions since the start of the war, Wall Street's optimism has quickly turned into doubt about a possible end to the fighting. This has led to sharp and sudden fluctuations in the prices of all assets, from stocks and bonds to oil.
The strong start to earnings season for major US companies also helped support the US stock market, and several more financial companies joined the list on Friday of companies posting earnings above analysts' forecasts for the start of 2026.
State Street rose 2.9% and Fifth Third Bancorp 1.9% after both reporting better-than-expected results for the last quarter.
These gains helped offset Netflix's 11.5% decline, which occurred despite the company also posting better-than-expected profits. Netflix did not raise its full-year revenue growth forecast, a move analysts believe may have disappointed some investors. Netflix also announced that Reed Hastings, co-founder and chairman of the streaming service, will step down from its board of directors in June, at the end of his term.
On foreign stock markets, indices surged in Europe following Iran's announcement regarding the Strait of Hormuz. The French CAC 40 jumped 2% and the German DAX rose 2.2%.
In Asia, where trading had closed before the announcement, indices declined. Japan's Nikkei 225 fell 1.8% and Hong Kong's Hang Seng dropped 0.9%, registering two of the sharpest declines.
In the bond market, Treasury yields fell sharply, as the drop in oil prices eased inflationary pressure. The yield on the 10-year Treasury note dropped to 4.24%, compared to 4.32% on Thursday evening.
