Stocks Rally as Hormuz Deal Sparks Risk-On Surge – US Market Wrap
A breakthrough agreement to reopen the Strait of Hormuz fueled a broad rally across risk assets, with stocks and cryptocurrencies advancing while oil prices tumbled on hopes the conflict that has shaken global markets may be approaching a resolution.
The S&P 500 gained 1.7%, while the Nasdaq 100 surged 3.1%. The Dow Jones Industrial Average climbed to a record high. US crude settled below $81 a barrel, easing concerns about energy-driven inflation and reducing pressure on central banks. Treasury two-year yields fell as expectations for future Federal Reserve rate hikes diminished. Bitcoin rose above $66,000, while the dollar was little changed.
The rally followed news that Trump and Vice President Vance signed a memorandum of understanding with Iran. US officials indicated that shipping through the Strait of Hormuz has already begun to resume and is expected to be fully restored by the end of the week.
Markets welcomed the development as a significant step toward reducing geopolitical uncertainty and restoring stability to global energy markets. While challenges remain in finalizing a broader agreement, particularly around Iran’s nuclear program, the reopening of the vital shipping route has improved the outlook for oil supplies and helped alleviate fears of a prolonged energy shock.
The combination of lower oil prices, easing inflation concerns, and optimism around a diplomatic resolution drove investors back into risk assets, reversing much of the caution that had dominated markets during the conflict.
