Crude oil prices plunged more than 10% on Friday after US President Donald Trump and Iran announced that the Strait of Hormuz is fully open again for oil tankers carrying crude from the Persian Gulf to customers worldwide, easing fears of supply disruptions.The sharp drop in oil prices lifted global markets, with US stocks rallying strongly. The S&P 500 rose 1% as it moved toward a third straight week of gains, while the Dow Jones Industrial Average jumped 722 points, or 1.5%, and the Nasdaq composite added 1.1% in morning trading.The price decline came immediately after Iran’s foreign minister, Abbas Araghchi, said on X that the passage for all commercial vessels through the strait “is declared completely open” and would remain so for the duration of the current ceasefire period in Lebanon. US crude fell 10.2% to $81.88 per barrel, while Brent crude dropped 10.3% to $89.09. Despite the fall, prices remain above their pre-war levels, indicating lingering caution in markets.Optimism has been building on Wall Street in recent weeks, with stocks rising 12% since late March on hopes that the United States and Iran can avoid a worst-case economic outcome despite ongoing conflict. The reopening of the Strait of Hormuz is seen as the clearest sign yet of easing tensions, although the situation remains uncertain. President Donald Trump said in a speech late Thursday that the war “should be ending pretty soon.”Shortly after Iran’s announcement, Trump said on his social media platform that the US Navy’s blockade of Iran remains “in full force” until both sides reach an agreement. He added that negotiations “should go very quickly in that most of the points are already negotiated,” emphasizing the statement in all capital letters.Companies with high fuel costs led the market gains as oil prices fell. United Airlines rose 9.8%, while Norwegian Cruise Line and Royal Caribbean Group both climbed 9.3%.A solid start to the earnings season also supported investor sentiment. State Street gained 2.9%, and Fifth Third Bancorp rose 1.4% after reporting stronger-than-expected quarterly results.Not all companies benefited from the rally. Netflix fell 9.2% despite posting higher profits, as it did not increase its full-year revenue forecast. The company also said cofounder and chairman Reed Hastings will step down from its board in June when his term expires.European markets also moved higher following the development, with France’s CAC 40 rising 2% and Germany’s DAX gaining 2.2%.Asian markets, which had closed before the announcement, ended lower. Japan’s Nikkei 225 fell 1.8%, and Hong Kong’s Hang Seng dropped 0.9%.In the bond market, Treasury yields declined as lower oil prices reduced pressure on inflation. The yield on the 10-year Treasury fell to 4.24% from 4.32% late Thursday.
