Wall Street Sets New Record Highs Amid Iran's Reopening of Strait of Hormuz; Oil Prices Decline Below $90

Global Markets Soar as Iran Announces Strait of Hormuz Fully Open

US equities opened with a sharp gap-up on Friday, 17 April, with two of the three key indices logging fresh record highs. The announcement by Iran that the Strait of Hormuz is fully open, allowing oil tankers to exit the Persian Gulf and supply crude to global markets, further boosted US stocks, which were already on a winning streak.

The S&P 500 surged 0.9% to a new record high of 7,100, while the Dow Jones Industrial Average jumped 722 points to the 49,300 level. The tech-heavy Nasdaq 100 advanced 0.8% to another peak of 26,572, putting all three benchmarks on track for a third consecutive weekly gain. This sharp increase in the indices comes after stocks jumped more than 11% since hitting a bottom in late March on hopes that the United States and Iran can avoid a worst-case scenario for the global economy despite their war.

Meanwhile, the dollar lost ground against all major peers. Treasury yields dropped, with the rate on the benchmark 10-year down seven basis points at 4.24%. This decline in yields and the sharp increase in stock prices can be attributed to the reopening of the Strait of Hormuz, which has signaled supply relief in the global oil market.

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The crude oil prices also plunged on Friday, with Brent crude and WTI falling 12% to their respective intraday lows. Brent crude, the international benchmark, was down 12% at $87.71 per barrel, while US benchmark crude fell similarly by 12% to $83.29 a barrel. This decline in oil prices has been supported by reports that the US may release $20 billion in frozen Iranian funds in exchange for enriched uranium stockpiles, with further talks expected this weekend.

Iran's Foreign Minister, Abbas Araghchi, posted on X that the strait "is declared completely open" in line with the ceasefire in Lebanon and would remain open for the remaining period of the truce. US President Donald Trump affirmed that the strait is "ready for full passage" in a social media post minutes later. The reopening of Hormuz was the most pressing issue for Trump, with the jump in fuel prices, including in the US, hurting him politically and frustrating American allies in Asia and Europe.

The development followed the announcement of a 10-day ceasefire agreed upon by Lebanon and Israel, which appeared to be holding on Friday, potentially boosting efforts to extend a broader truce involving Iran, the United States, and Israel, AP reported. Trump on Thursday said a deal to end hostilities with Iran was close. The two have been negotiating via Pakistan this week amid a ceasefire between them, which is due to end on 21 April.

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