Oil Plummets and US Equities Rally as Iran Reopens Strait of Hormuz

Oil prices crashed on Friday following an announcement from Iranian Foreign Minister Seyed Abbas Araghchi that the Strait of Hormuz is "completely open" for commercial vessels. The move coincides with a 10-day ceasefire between Israel and Lebanon, providing a critical reprieve for global shipping lanes. The reopening of this vital artery has triggered a massive relief rally across financial markets, easing fears of a prolonged energy supply shock. While President Donald Trump confirmed the reopening, he clarified that the current US naval blockade will remain active until negotiations with Iran are fully completed. Energy benchmarks reacted violently to the news. Brent crude plummeted 13% to $86.30 per barrel, while WTI sank 13% to $79.20. Despite the sharp decline, both benchmarks remain elevated compared to pre-war levels of $73 and $67, respectively. Wall Street responded with a broad rally as risk appetite returned. The Dow Jones Industrial Average surged 1,032 points, or 2.1%, effectively erasing all losses incurred since the conflict began. The S&P 500 gained 1.3% and the Nasdaq rose 1.6%, with the latter extending its longest winning streak since 2009. Treasury yields fell sharply as bond traders bet that the worst of the oil shock has passed. However, some strategists remain cautious; Wells Fargo Investment Institute noted that the market's stability remains entirely dependent on the progression of ongoing diplomatic negotiations.