The US stock market started Friday with an unusual boost, key news from the Middle East: the reopening of the Strait of Hormuz. This strategic passage, through which nearly a fifth of the world’s oil circulates, rekindled optimism among investors and took the main Wall Highway indices (Dow Jones, S&P 500 and Nasdaq) to historic levels.
Following the announcement by the Iranian government, which confirmed that the sea passage in the Strait of Hormuz is “completely open” during the ceasefire, Wall Highway went up. The Dow Jones index rose more than 1,000 points, equivalent to 2.2%. For its part, The S&P 500 advanced 1.4% and exceeded 7,100 points for the first time. The Nasdaq also rose 1.6%, setting new all-time highs. Even the small business index, the Russell 2000, hit a new record with a rise of 2.2%.
“In line with the ceasefire in Lebanon, The passage of all merchant ships through the Strait of Hormuz is declared completely open for the rest of the ceasefire period,” Abbas Araghchi, Iran’s foreign minister, wrote on his X account.
Added to this was President Donald Trump, who confirmed the ceasefire agreement between Israel and Lebanon for 10 days. Likewise, the president expressed his gratitude for freely reopening the Strait of Hormuz.
“Iran just announced that the strait is completely open and ready for free movement. Thank you!” Trump wrote on his Truth Social account.
However, Trump also made it clear that the US naval blockade will continue until a final agreement with Iran is reached.
The price of oil was another of the markets that reacted to the statements. US crude oil, West Texas Intermediate (WTI), fell more than 14%, while Brent fell nearly 13%. In weekly terms, oil accumulates a loss of 16%, its worst performance since 2020.
This also benefits sectors such as airlines and cruise ships, which depend on fuel. Companies like Boeing (+3%) and Royal Caribbean (+10%) posted strong gains on the stock marketalong with technology and consumer giants such as Amazon and Airbnb.
“I think the market has left the worst-case scenarios behind and sees a path for the United States and Iran to end the conflict and the Strait of Hormuz to remain open,” Anthony Saglimbene, a strategist at Ameriprise Financial, told CNBC. “As long as this remains the most viable path, the markets will take it into account.”
Although the stock markets rose on Friday after the announcement of the opening of the Strait of Hormuz, not everything is optimistic among experts. Doug Beath, global equity strategist at Wells Fargo Investment Institute, warned investors against becoming overconfident about this fact.
“In the short term, markets are more concerned about the free flow of oil. But we recommend caution,” Beath said. “The Iranian foreign minister stated that the ships would have to follow the route designated by Iran, which does not rule out that Iran charges tolls on oil tankers. The minister added that The opening is valid until the closing of the ceasefire, April 21“.
For novice investors, don’t let this momentum in the stock market lead you to make impulsive decisions. Just because the stock market has had this boost does not mean that it will maintain it. The shares in Wall Highway are reactive and, just as today is excellent news for those who were invested and want to realize their profits, in a few days the trend may be different and you will lose money if you invest now and the stock market falls. Remember that investing in the stock market carries risks and you should be cautious if you do not have the necessary knowledge to do so.
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