Stocks Rally While Oil, Dollar Drop on Hormuz Hope: Markets Wrap
(Bloomberg) — Equities climbed after Iran announced that the Strait of Hormuz is now “completely open” for commercial traffic, prompting traders to take on more risk after an extraordinary rally. Oil and the dollar tumbled.
The S&P 500 rose 0.8% after the benchmark notched back-to-back record highs. The index is on course for a third week of gains of more than 3%, a stunning reversal following mounting signs that the US and Iran have been looking to deescalate the conflict that has roiled energy markets. Optimism over artificial intelligence and robust earnings have added to the momentum.
Brent crude dropped below $90 a barrel after a social media post attributed to Iran’s foreign minister said the passage for commercial vessels through Hormuz, a critical chokepoint for global energy supplies, was open.
Separately, President Donald Trump said a naval blockade will remain in full force and in effect until a deal is reached. The president previously claimed that Iran has made key concessions in negotiations with the US. Axios reported that one element under discussion involved the US releasing $20 billion in frozen Iranian funds in exchange for Tehran giving up its enriched uranium stockpile.
The dollar lost ground against all major peers. Treasury yields dropped with the rate on the benchmark 10-year down seven basis points at 4.24%.
“Now that the dust appears to be settling on events in the Middle East, market attention will once again focus back on the fundamentals, in particular earnings given that the season has just started,” said Daniel Murray, deputy chief investment officer at EFG Asset Management. “Earnings expectations are buoyant, consistent with solid underlying macro trends.”
Some Gulf Arab and European leaders said that a US-Iran peace deal could take about six months to agree.
It took the S&P 500 just 11 days to lurch from an oversold reading to Thursday’s arrival in overbought territory. That has only been outpaced by a rally in 1982. Explanations for the abrupt change in momentum point to a combination of hedge unwinding, systematic buying and short covering by hedge funds in macro products.
While the Nasdaq’s 12-day winning streak has propelled the index to fresh all-time highs, tech valuations remain near their 10-year average. Earnings estimates have been rising in concert with stocks, keeping forward price-to-earnings ratios at low levels.
“This reset provides a more constructive entry point in equities, particularly across large-cap quality growth,” said Scott Rubner, Citadel Securities head of equity and equity derivatives strategy.
Netflix Inc. slumped in US premarket trading after an underwhelming forecast. Alstom SA shares slid the most in over two years in Paris after the manufacturer withdrew financial guidance for this fiscal year. An index of Asian shares snapped a three-day streak of wins.
What Bloomberg Strategists Say:
“For now, it looks like the tailwind of the rally is besting any weekend-related Friday concerns. Ceasefire optimism remains widespread, and oil prices are providing the right cues to propel a further financial-asset rally. This epic rally has only taken year-to-date returns to levels that are quite normal.”
— Cameron Crise, macro strategist. For the full analysis, click here.
Corporate News:
A consortium including Bouygues Telecom, Iliad SA and Orange SA has entered exclusive negotiations to buy billionaire Patrick Drahi’s telecom company SFR. Netflix Inc. gave a forecast for the second quarter that fell short of analysts’ expectations, sending the shares tumbling in premarket trading. OnlyFans, the platform best known for adult content, is in advanced talks to sell a minority stake to Architect Capital in a deal that would value the British company at more than $3 billion. Apple Inc.’s marketing executive in charge of the Apple Watch, AirPods, health and smart home initiatives said he’s retiring. Some of the main moves in markets:
Stocks
The S&P 500 rose 0.7% to a record high as of 9:31 a.m. New York time The Nasdaq 100 rose 0.9% to a record high The Dow Jones Industrial Average rose 1.2%, more than any closing gain since April 8, 2026 The Stoxx Europe 600 rose 1.2%, more than any closing gain since April 8, 2026 The MSCI World Index rose 0.8% to a record high Currencies
The Bloomberg Dollar Spot Index fell 0.4%, more than any closing loss since April 8, 2026 The euro surged 0.4%, more than any closing gain since April 8, 2026 The British pound rose 0.4% to $1.3576 The Japanese yen surged 0.5%, more than any closing gain since April 8, 2026 Cryptocurrencies
Bitcoin strengthened 1.6%,rising for the fifth straight day, the longest winning streak since Jan. 5, 2026 Ether rose 2.3% to the highest since Jan. 31, 2026 Bonds
The yield on 10-year Treasuries declined seven basis points, more than any closing decline since March 30, 2026 Germany’s 10-year yield declined seven basis points to 2.97% Britain’s 10-year yield declined nine basis points, more than any closing decline since April 8, 2026 Commodities
West Texas Intermediate crude fell 11%, the most since April 8, 2026 Spot gold rose 1.4% to $4,855.49 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Neil Campling, Subrat Patnaik, Jan-Patrick Barnert, Michael Msika, Levin Stamm and Daniel Curtis.
©2026 Bloomberg L.P.
