Stocks Surge as Hormuz Reopening Fuels Risk-On Rally – US Market Wrap
Risk assets jumped again on speculation the Iran war may be nearing an end, extending a month-long rally that has pushed the S&P 500 to a series of record highs, lifted Bitcoin by roughly $12,000, and supported gains in credit and gold.
A broad risk-on move swept through Wall Street after Iran said the Strait of Hormuz was fully open to commercial traffic, removing much of the anxiety that had weighed on energy and equity markets during weeks of conflict in the Middle East. Brent crude fell below $90 a barrel for the first time in over a month, while the dollar weakened against all major peers, even though the shape of any eventual US-Iran agreement remains unclear.
The reopening of Hormuz helped lift one of the last major overhangs for markets that had already been grinding higher. Renewed enthusiasm around artificial intelligence, a stronger-than-expected earnings season, and growing expectations that the Federal Reserve could cut rates again before year-end had already helped drive the S&P 500 toward its biggest monthly gain since 2020, despite the war entering its seventh week. With shipping through the strait resuming, the threat of a prolonged oil shock dragging on global growth has eased significantly.
The S&P 500 rose 1.2% on Friday, marking a third straight weekly gain of more than 3%. The Nasdaq 100 extended its winning streak to 13 sessions, powered by another rally in semiconductor stocks tied to the AI theme, its longest run of gains in nearly 13 years.
