The Nasdaq notched its longest winning run since 1992 as US stock indexes hit fresh records on Friday, after Iran declared the Strait of Hormuz open following a reported ceasefire between Israel and Lebanon. The announcement sent oil tumbling and pushed investors back into risk assets.

Record closes, streaks and sector winners The S&P 500 climbed 1.2% to finish at 7,126.06, moving past the 7,100 mark for the first time. The Nasdaq Composite rose 1.52% to 24,468.48, marking a 13th straight daily win — the longest run since 1992. The Dow Jones Industrial Average jumped 868.71 points, or 1.79%, to close at 49,447.43. The Russell 2000 also notched a fresh high, with small caps rising more than 2%. Stocks most exposed to shipping and travel risk led the advance. Boeing shares were up about 2%, while Royal Caribbean rallied roughly 7%. Big tech names such as Amazon and Airbnb also moved higher as investors rotated back into riskier growth positions. What set markets alight The immediate trigger was a short statement from Iran’s foreign ministry. Seyed Abbas Araghchi wrote on X that, "In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire, on the coordinated route as already announced by Ports and Maritime Organisation of the Islamic Rep. Of Iran." That text followed a reported agreement on a 10-day ceasefire between Israel and Lebanon. Oil plunged, markets pivoted Energy markets reacted fast. US West Texas Intermediate futures fell almost 12% to settle at $83.85 a barrel, while Brent crude declined about 9% to $90.38 a barrel. The swift drop in oil eased a major near-term risk premium and helped push investors to take profits out of defensive and commodity-heavy trades and redeploy capital into equities. Analysts said markets appeared to have priced in a less severe outcome, reducing the near-term risk premium. Fragile foundations beneath headline highs The rallies and new records are clear — so is the reason for caution. Much of the upside on Friday traced directly to a political development that could be reversed. Iran’s state-linked Tasnim news agency, for example, said ships and cargos linked to "hostile nations" wouldn't be allowed to transit, and that the strait could be closed again if a US blockade persisted. Those caveats mean the reopening may be conditional rather than permanent. Markets tend to price the simplest path to safety, and that can create a risk of sharp re-pricing if the diplomatic picture shifts. The Nasdaq’s 13-day streak is rare, but long streaks can end quickly when the thread holding them together frays. Other signals were mixed. Small-cap strength helped the Russell 2000 hit a high, yet breadth data for the session showed several mega-cap names driving much of the gains. Friday’s winners included cyclical and travel-related names that benefit most from a calm shipping environment — if the calm proves short-lived, those shares could feel pressure fast.

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Analysts warned the gains rest on fragile diplomatic ground and could quickly reverse if the ceasefire or the strait reopening prove temporary — leaving investors watching developments closely.

This article was created with AI assistance.