US Stock Market Today: Oil Prices Drop 10% as Dow, S&P 500, and NASDAQ Rally After Strait of Hormuz Reopens

Oil prices fell sharply on Friday, while Wall Street moved higher, after Iran said the Strait of Hormuz is open to commercial shipping during the current ceasefire. The move eased fears of a fresh supply shock in global energy markets and pushed investors back into equities. 

The Dow Jones Industrial Average, S&P 500, and NASDAQ all rose as traders responded to lower crude prices, easing inflation pressure, and hopes that talks between Washington and Tehran may continue.

Oil drops as Supply Fears Ease

Oil prices came under pressure after Iran’s Foreign Minister Abbas Araqchi said passage through the Strait of Hormuz was “completely open” for commercial vessels during the ceasefire period. Brent crude fell about 13% to $86.52 a barrel, while US West Texas Intermediate dropped to $81.19, both their lowest levels since March 10.

The market reaction was direct. Traders had priced in a supply risk premium while the strait faced disruption. Once Iran signaled that commercial traffic could resume, part of that premium began to fade. The Strait of Hormuz remains one of the world’s most important energy chokepoints, so any sign that cargo can move again often pushes crude lower.

The decline in oil also reflected a wider shift in sentiment. Hopes for an easing in US-Iran tensions reduced demand for defensive trades in energy. 

At the same time, investors started to reassess whether high fuel costs would keep feeding inflation through the rest of the year. The drop in energy prices may also affect expectations for Federal Reserve rate cuts later in 2026.

Wall Street Rises as Investors Buy Risk Assets

US stocks climbed as lower oil prices supported sectors sensitive to fuel costs and interest-rate expectations. By mid-morning on April 17, the Dow was up 554.22 points, or 1.14%, to 49,136.99. 

The S&P 500 rose 54.59 points, or 0.78%, to 7,095.87, while the NASDAQ gained 252.37 points, or 1.05%, to 24,355.07. The S&P 500 and NASDAQ had already posted record closes on Thursday.

Airline and cruise stocks were among the clearest gainers because lower fuel prices help reduce operating costs. American Airlines and United Airlines each jumped more than 7%, while Carnival and Norwegian Cruise also posted strong gains. 

By contrast, the S&P 500 energy sector dropped 4.8%, with Exxon Mobil and Chevron falling as crude retreated. The move also reflected broader risk appetite. The CBOE Volatility Index fell to a two-month low, showing calmer investor positioning. 

Lower oil prices reduced the immediate concern that the conflict would keep pushing inflation higher. As a result, rate-sensitive parts of the market, including technology and consumer discretionary stocks, drew support. The prospect of softer inflation also revived discussion over whether the Fed may still cut rates by December.

Is the Strait of Hormuz Fully Open Now?

The Strait of Hormuz is open for commercial vessels, based on Iran’s public statement, but traffic has not returned to normal conditions. Iran said commercial ships must use coordinated routes approved by its Ports and Maritime Organisation, while military vessels remain barred. 

A senior Iranian official also said ships passing through the area need coordination with the Islamic Revolutionary Guard Corps.

A fully open waterway usually means unrestricted transit under normal operating conditions. Current conditions do not meet that standard. Shipping companies are still seeking operational clarity before sending vessels through the route in normal volumes.

 Major firms remain cautious because questions remain over freedom of navigation, mine risk, insurance costs, and the exact rules for passage.

A separate security issue also remains in focus. A US Navy advisory said the mine threat in parts of Hormuz is still “not fully understood" and warned mariners to consider avoiding affected areas. 

Meanwhile, a Pakistani-flagged tanker carrying UAE crude has already exited the Gulf through the strait, showing that movement has resumed, but risks have not disappeared.

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