Stocks extend 'astonishing' rally as Middle East tensions ease further
The stock market continued its record-setting rally on Friday, after Iran announced that the Strait of Hormuz had reopened to commercial shipping, bolstering investors’ optimism that the conflict in the Middle East was nearing an end.
The S&P 500, which set a record high Wednesday, rose an additional 1.2% on Friday, notching its best streak of daily gains this year.
Already this month, the S&P 500 has climbed almost 10%, which would be the best monthly gain since 2020 when markets were rebounding from the pandemic-induced sell-off. The index is nearly 4% higher than it was before the United States and Israel started attacking Iran on Feb. 28.
The Nasdaq composite index, which is filled with technology stocks, has staged an even more ferocious rally. The index posted its 13th consecutive day of gains, its best run since 1992.
“The velocity of this ascent has been nothing short of astonishing,” Jim Reid, an analyst at Deutsche Bank, said in a research note this week.
Friday’s rise was fueled by Iran’s announcement that the Strait of Hormuz, the crucial shipping lane through which roughly a fifth of the world’s oil supply typically passes, would reopen to shipping.
Oil prices fell sharply, with Brent crude falling more than 9% to just over $90 per barrel, as investors bet that worldwide oil supplies would soon be replenished. Oil last traded at that level more than a month ago, in the first weeks after the war started. It remains more than 20% higher than before the war.
Reopening the strait is not a panacea, and it is not immediately clear whether Iran meant that the strait would stay open for the duration of the U.S.-Iran ceasefire, which is set to end on Tuesday, or the Israel-Lebanon ceasefire, which would end later.
But if ships start going through the strait and hostilities do not restart, prices at the pump in the United States will most likely keep dropping.
Wall Street’s fears about the economic impact of the conflict have been easing in recent weeks as the Trump administration signaled its interest in a peace deal, even when talks with Iran faltered last weekend. On Friday, the VIX volatility index, often referred to as Wall Street’s “fear gauge,” fell to its lowest level since the war in Iran began.
Investors have been betting that the war, in the end, would not dent profits in corporate America. That optimism was supported this week by strong earnings reports from large banks like JPMorgan Chase and other companies like PepsiCo, revealing big profits through the first three months of the year. Financial results for the companies in the S&P 500 are expected to hit double-digit growth for the sixth quarter in a row.
Many analysts noted that trading volumes remained relatively subdued given the sharp stock rebound, pointing to investors’ hesitancy to buy into the bull market in a big way.
Instead, analysts said, investors have turned to derivatives markets, trading financial instruments that allow them to benefit from the rally without immediately buying more stocks.
The put-call ratio, which measures derivatives bets on the market rising versus bets on the market falling, declined Thursday to its lowest level since January, according to Cboe Global Markets, an exchange operator. A falling ratio is a sign of bullish bets outweighing bearish ones. The exchange’s SKEW index has also fallen sharply this week, a sign of investors dialing down longer-term hedges against a potential market sell-off, another bullish signal.
Still, this week was the third straight week of relatively modest inflows into the market, with more than $17 billion flowing into funds that buy U.S. stocks for the week through Wednesday, according to EPFR Global, a data provider.
The outcome of negotiations between the United States and Iran over the weekend will “set the tone” for trading next week, analysts at Deutsche said Friday.
This article originally appeared in The New York Times.
Copyright 2026 The New York Times Company
This story was originally published April 17, 2026 at 4:32 PM.