U.S. stocks opened higher on Friday, with the Nasdaq and S&P 500 indices reaching new all-time highs. The gains followed announcements of a ceasefire between Israel and Lebanon and Iran's declaration that the Strait of Hormuz is fully open to commercial vessels. Crude oil prices fell sharply.
The Dow Jones Industrial Average rose 515.93 points, or 1.06%, to 49,094.65. The Nasdaq Composite increased 211.17 points, or 0.88%, to 24,313.88. The S&P 500 climbed 47.17 points, or 0.67%, to 7,088.45.
Iranian Foreign Minister Seyed Abbas Araghchi stated on platform X that, in coordination with the Lebanon ceasefire, all merchant ships may now fully transit the Strait of Hormuz using the coordinated routes previously announced by Iran's Ports and Maritime Organization for the remainder of the ceasefire period.
In response, U.S. President Donald Trump expressed gratitude for Iran's decision. He posted on social media, "Iran just announced the Iran Strait is fully open for complete passage. Thank you!"
This development came after Trump announced on Thursday that leaders from Israel and Lebanon had agreed to a 10-day ceasefire, effective 5 p.m. Eastern Time that day.
Trump also commented on Thursday that the Iran war "should be over very soon." He made the remarks during an event in Las Vegas, adding that the conflict was "going along pretty well."
Earlier in the week, Trump had indicated that the Middle East conflict was "very close to ending" and suggested that Tehran was "very eager to make a deal."
Expectations for a peace agreement have driven stock markets to record levels recently, with all three major indexes poised for solid weekly gains. The blue-chip Dow Jones rose 1.4% for the week, while the S&P 500 and Nasdaq gained 3.3% and 5.2%, respectively.
However, Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, cautioned that the limited breadth of the current market rally may not necessarily indicate a sustainable upward trend.
Sonders noted, "We've hit a new high in just 11 days. That's fine by itself, but I think we need to see more participation beneath the surface to feel comfortable that there's some durability here."
She added, "I just think there are still a lot of unanswered questions. In this environment, I believe you should return to the discipline of diversification within and across asset classes. Don't make big bets here; use volatility to your advantage, and perhaps increase the frequency of rebalancing, especially if you are an investor who rebalances purely based on the calendar."
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