Oil prices fell sharply on Friday after Iran declared the Strait of Hormuz open for commercial shipping, easing fears of supply disruptions. US crude dropped 9.4% to $82.59 per barrel, while Brent crude fell 9.1% to $90.38, though prices remain above pre-war levels.
The S&P 500 climbed 1.2% to a record high, marking a third straight week of gains. The Dow Jones Industrial Average surged 868 points, or 1.8%, while the Nasdaq rose 1.5%. The rally was driven by hopes that lower oil costs would reduce inflation and allow the Federal Reserve to cut interest rates.
Airlines and cruise operators surged on lower fuel costs, with United Airlines up 7.1% and Royal Caribbean gaining 7.3%. Homebuilders and auto retailers also rose on expectations of lower mortgage and loan rates, with PulteGroup up 5% and Carvana climbing 7%.
The yield on the 10-year Treasury fell to 4.24% from 4.32%, reflecting lower inflation expectations. President Trump said the US blockade of Iranian ports remains in force but suggested a deal could be reached soon, reinforcing optimism.
Earnings season boosted sentiment, with State Street and Fifth Third Bancorp beating forecasts. However, Netflix fell 9.7% despite better-than-expected profits, as it held its revenue forecast steady, disappointing some investors.
