Stocks Hit Record Highs as Hormuz Deal Hopes Weigh on Oil – US Market Wrap

Hopes for an agreement to restore shipping through the Strait of Hormuz lifted stocks to fresh record highs, while bonds advanced and oil prices fell. Strong corporate earnings also helped support investor sentiment.

The S&P 500 and the Dow Jones Industrial Average both closed at all-time highs, while the Nasdaq 100 surged 3.3%. Semiconductor stocks recorded their strongest four-day rally since 2020. After the close, SpaceX reported strong revenue, while AMD traded lower after issuing an uninspiring outlook. Brent crude fell below $80 a barrel.

Optimism around diplomacy continued to build, with reports that an interim agreement centered on reopening the Strait of Hormuz is gaining momentum. Qatar said a proposal has been drafted, while officials from both the US and Iran expressed confidence that a deal could be reached. President Donald Trump also discussed efforts to reduce tensions with Qatar’s Emir, while reports indicated Tehran is considering allowing European nations to remove mines from the waterway.

Despite the decline in oil prices, inflation concerns remain. While lower energy costs may reduce some pressure, broader price growth is still expected to remain elevated, and recent Federal Reserve commentary suggests policymakers remain alert to inflation risks stemming from both the Iran conflict and continued investment in artificial intelligence.