NEW YORK (AP) — Oil prices dropped more than 13% Friday, and U.S. stocks raced toward another record after Iran said the Strait of Hormuz is open again for oil tankers carrying crude from the Persian Gulf to customers worldwide.

The S&P 500 leaped 1.4% as Wall Street rallied toward the finish of a third straight week of big gains, its longest such streak since Halloween. A freer flow of oil would not only help drivers angry about expensive gasoline, it would also take away upward pressure on inflation that’s hurting virtually everyone around the world.

The Dow Jones Industrial Average was up 1,061 points, or 2.2%, as of 10:50 a.m. Eastern time, while the Nasdaq composite was 1.6% higher

The U.S. stock market has jumped more than 12% since hitting a bottom in late March on hopes that the United States and Iran can avoid a worst-case scenario for the global economy despite their war. Friday’s reopening of the Strait of Hormuz, which may only be temporary, is the clearest signal yet for optimism, and President Donald Trump said late Thursday that the war “should be ending pretty soon.”

The price for a barrel of benchmark U.S. crude plunged immediately after Iran’s foreign minister, Abbas Araghchi, posted on X that the passage for all commercial vessels through the strait “is declared completely open” as a ceasefire appears to be holding in Lebanon. He said it would stay open for the remaining period of the ceasefire, and U.S. oil tumbled 13% to $79.31 per barrel.

Brent crude, the international standard, dropped 13.4% to $86.11 per barrel. To be sure, it remains above its $70 price from before the war, indicating some caution is still embedded in financial markets.

Several times since the war began, optimism on Wall Street has quickly swung to doubt about a possible end to the fighting. That in turn has caused vicious and sudden swings of prices for everything from stocks to bonds to oil.

Minutes after the Iranian foreign minister’s announcement of the reopening of the Strait of Hormuz, Trump said on his social media network that the U.S. Navy’s blockade of Iran remains “in full force” until both sides reach a deal on the war. He, though, also said that “should go very quickly in that most of the points are already negotiated” and emphasized it by using all capital letters.

Companies with big fuel bills soared to some of Wall Street’s biggest gains following the easing of oil prices.

United Airlines surged 11.2%. On Thursday, the head of the International Energy Agency had said that Europe has “maybe six weeks or so” of remaining jet fuel supplies.

Source: WPLG