Strait of Hormuz Reopens, Oil Prices Plunge and Wall Street Surges

AOL.com reported Saturday that the Strait of Hormuz is once again open for commercial shipping. Iranian Foreign Minister Abbas Araghchi posted the announcement on X, declaring passage for all commercial vessels through the waterway “completely open.” The move sent oil prices and global markets into a sharp reversal.

Oil Markets React to Hormuz Announcement

Benchmark US crude fell 9.4% on the news, settling at $82.59 per barrel. Brent crude dropped 9.1% to close at $90.38 per barrel. Both figures still sit well above pre-war levels near $70, a sign that traders remain cautious. Araghchi said the strait would remain accessible for the duration of the current ceasefire period.

President Donald Trump added nuance shortly after the announcement. He stated the US Navy’s blockade of Iranian ports stays “in full force” until a formal deal is struck. He also said a deal “should go very quickly” given how many terms are already negotiated.

Wall Street Logs Third Straight Week of Gains

The S&P 500 jumped 1.2% to a record close, extending a winning streak not seen since October. The Dow Jones Industrial Average surged as many as 1,100 points intraday before finishing up 868 points, or 1.8%. The Nasdaq composite added 1.5%. US equities have now climbed more than 12% from their late-March low as markets priced in a less catastrophic outcome to the conflict.

Fuel-intensive companies led the gains. United Airlines rose 7.1% and Southwest Airlines climbed 5.1%. Cruise operators Royal Caribbean Group and Carnival each gained more than 7%. The head of the International Energy Agency had warned just one day earlier that Europe held roughly six weeks of jet fuel supplies.

Background: A War-Driven Commodity Shock

The war between the US and Iran sparked one of the sharpest commodity price shocks in recent memory. Closure of the Strait of Hormuz, through which a significant share of global crude moves, pushed oil well above prior trading ranges. The disruption rippled into inflation expectations, bond yields, and Federal Reserve rate-cut calculations. Several rallies since fighting began quickly reversed on fresh doubts, producing violent swings across asset classes.

Rate Hopes Lift Housing and Auto Stocks

A sustained drop in oil prices could ease inflation enough for the Federal Reserve to resume cutting interest rates. The 10-year Treasury yield fell to 4.24% from 4.32% the previous session. Homebuilder PulteGroup gained 5% and materials supplier Builders FirstSource rose 5.5% on hopes of lower mortgage costs. Auto retailer Carvana climbed 7% on expectations that cheaper credit would lift vehicle sales.

Strong early earnings also underpinned sentiment. State Street and Fifth Third Bancorp both beat quarterly profit estimates. Netflix slid 9.7% despite topping earnings forecasts after declining to raise its full-year revenue outlook.

Read Next: What the Iran Conflict Means for Global Energy Markets