NEW YORK – The benchmark S&P 500 and the tech-heavy Nasdaq each rallied to their third record close in a row on April 17, while the blue-chip Dow marked its highest finish since late February, as investors cheered Iran’s decision to open the Strait of Hormuz and were optimistic it could reach a deal with the United States to end their war.
Iranian Foreign Minister Abbas Araqchi said in a post on X that passage for all commercial vessels through the Strait of Hormuz was “completely open” after a ceasefire agreement in Lebanon.
This followed US President Donald Trump’s announcement that talks could take place this weekend between Tehran and Washington and that they could soon secure a peace agreement to end the Iran war, which has left thousands dead since the US and Israel launched joint strikes on Iran on Feb 28.
While statements from both sides left uncertainty over how quickly shipping could resume, US crude oil prices tumbled more than 11 per cent, alleviating inflation concerns.
The Strait of Hormuz is a vital waterway for global energy transportation.
“The concern about oil putting the world into a slowdown diminishes as it’s onward and upward for a possible final deal,” said Mr Bob Doll, chief executive officer of Crossmark, who noted that while there is still no signed US-Iran deal, “it looks like it’s heading in a direction that’s enough for the market to go up.”
The technology-heavy Nasdaq Composite gained 365.78 points, or 1.52 per cent, to 24,468.48, for its 13th consecutive advance, marking its longest winning streak since 1992.
The Dow Jones Industrial Average rose 868.71 points, or 1.79 per cent, to 49,447.43, the S&P 500 gained 84.78 points, or 1.2 per cent, to 7,126.06.
Unofficially, for the week, the S&P 500 gained 4.53 per cent, the Nasdaq rose 6.84 per cent, and the Dow climbed 3.2 per cent.
The small-cap Russell 2000 outperformed large-cap gains, closing up 2.1 per cent, and also registered a record closing high after it earlier hit its first intraday record high since the war erupted.
“Energy prices coming down has a bigger impact on small caps because they have tighter margins,” said Mr Nick Johnson, CEO and CIO of Willis Johnson and Associates, adding, “it’s starting to become clear that the US and Iran want to see this behind them.”
Among the S&P 500‘s 11 major industry sectors, energy was the biggest loser, ending down 2.9 per cent, with Exxon Mobil, down 3.6 per cent, and Chevron, 2.2 per cent, creating the benchmark’s second and third biggest drags on the day.
The biggest gainer was consumer discretionary, which finished up just under 2 per cent, with cruise operators leading its advances. Royal Caribbean jumped 7.3 per cent while Carnival rose 7 per cent. Industrials was the second strongest sector, finishing up 1.8 per cent with airline United Airlines up 7 per cent, and leading its percentage gains.
Still, some analysts cautioned that logistical challenges remain for shippers.
“Ship operators still face astronomical war-risk insurance premiums, potential mine hazards, and uncertainty about enforcement,” said Mr Erik Bethel, general partner at maritime-focused investment firm Mare Liberum.
The S&P’s biggest drag was from Netflix, which tumbled 9.7 per cent after forecasting current-quarter earnings below expectations. The company also announced the exit of co-founder and longtime Chairman Reed Hastings, ending a 29-year tenure.
Alcoa shares ended down 6.8 per cent after the aluminium producer reported first-quarter profit and revenue below analysts’ estimates, citing elevated costs and softening demand.
Advancing issues outnumbered decliners by a 4.03-to-1 ratio on the New York Stock Exchange, where there were 623 new highs and 46 new lows. On the Nasdaq, 3,685 stocks rose and 1,183 fell as advancing issues outnumbered decliners by a 3.11-to-1 ratio. The S&P 500 posted 49 new 52-week highs and no new lows.
Volume was relatively strong on US exchanges, where 20.29 billion shares changed hands, compared with the 19.12 billion moving average for the last 20 sessions. REUTERS
