U.S. stocks surged on Friday after Iran announced that the Strait of Hormuz — the narrow waterway through which roughly a fifth of the world’s oil supply passes — is once again fully open to commercial tankers. The news sent crude prices tumbling more than 10% and lifted equities across the board, capping a third consecutive winning week for all three major indexes. Investors also pointed to growing expectations of potential Federal Reserve interest-rate cuts later this year as an additional tailwind.
The Dow Jones Industrial Average jumped 911.44 points, or 1.88%, to close at 49,447.43. The S&P 500 gained 84.78 points, or 1.20%, finishing at 7,126.06. The Nasdaq Composite advanced 365.78 points, or 1.52%, to 24,468.48 — marking its 13th straight session of gains, the longest winning streak for the tech-heavy index since 1992. Small caps outperformed the broader market, with the Russell 2000 climbing 2.11% to a new all-time high of 2,776.90.
Notable Movers
The plunge in oil prices reshuffled sector leadership. Energy names bore the brunt of the sell-off: Exxon Mobil (XOM) fell 3.65% and Chevron (CVX) dropped 2.21% as traders repriced the geopolitical risk premium that had been baked into crude over recent weeks.
On the winning side, travel and transportation stocks rallied on the prospect of cheaper jet fuel and calmer shipping lanes. Royal Caribbean Cruises (RCL) surged 7.34% and American Airlines Group (AAL) gained 4.16%.
Netflix (NFLX) was the session’s most notable decliner among mega-caps, sinking 9.71% after the streaming giant issued a softer-than-expected revenue outlook and announced that co-founder Reed Hastings would step down from the board.
Elsewhere, Ally Financial (ALLY) soared 8.10% following a strong first-quarter earnings report that topped analyst estimates. Apple (AAPL) added 2.65% on reports of improving iPhone demand in China, while Tesla (TSLA) climbed 2.96% to close at $400.62.
Looking Ahead
With geopolitical tensions easing and the Nasdaq riding a historic streak, investors will be watching closely next week for any follow-through in the oil market and whether the Strait of Hormuz remains open without disruption. Earnings season continues to roll in, and any surprises — positive or negative — could set the tone for whether this rally has further room to run. The Federal Reserve’s next policy meeting is also on the horizon, and traders will be parsing every piece of economic data for clues on the timing and pace of potential rate cuts. For now, the mood on Wall Street is decidedly optimistic, but the speed of this advance means any unexpected headline could trigger a pullback.