Global Markets Rally as Iran Confirms Strait of Hormuz Remains Open

US equity markets saw an intraday boost as investors reacted positively to news from Iran regarding the Strait of Hormuz. The announcement that the critical maritime corridor remains open triggered a swift reversal in energy prices and a lift in risk appetite across broad indexes. The Strait of Hormuz serves as the world's most important oil transit chokepoint, with a significant portion of global petroleum passing through the narrow waterway. Any perceived threat to its stability typically spikes volatility in crude futures and pressures global equity valuations due to fears of supply-side inflation. Following the declaration, oil prices plunged as the market rapidly unwound the geopolitical risk premium. This price action suggests that traders had previously priced in a higher probability of disruption, which has now been mitigated by the official statement. The resulting rally in US benchmark indexes reflects a broader relief trade. By removing the immediate threat of a supply shock, markets are pricing in lower energy costs and reduced geopolitical instability, favoring equities over safe-haven assets.