MW Airline and cruise stocks soar, as 'TACO' gives way to 'trust in Trump alone'
By Bill Peters
President Trump is the only one who has been 'vocally confident' in the prospect of peace through superior firepower - so only he can keep the rally going, strategist says
United Airlines was among the S&P 500's biggest gainers on Friday.
United Airlines, Royal Caribbean Group and other travel stocks surged on Friday to pace the S&P 500 index's gains, after Iran and U.S. President Donald Trump declared the Strait of Hormuz "open" for now - easing concerns about oil supplies, even as some analysts questioned the rally's stability.
The gains arrived after Iran's blockade of the strait, a key shipping lane that ushers through around 20% of the world's oil, threatened a prolonged stretch of higher fuel prices, jet-fuel shortages, fewer flights and higher costs for consumers. Oil prices (CL00) (BRN00) fell in tandem on Friday.
Royal Caribbean's stock $(RCL)$ was up around 10.4% in recent afternoon trading, while United shares $(UAL)$ rose 9.7%.
The U.S. Global Jets ETF JETS was up 6.9%, and has run up 15.6% so far in April after falling 13.4% in March. Fuel is generally one of the biggest costs for airlines and cruise-ship operators.
Elsewhere, Carnival's stock $(CCL)$ gained 9.4% and Southwest Airlines shares $(LUV)$ added 8.7%, at last check.
However, amid short-term and potentially fragile cease-fire deals between the U.S. and Iran, as well as Israel and Lebanon, Macquarie strategist Thierry Wizman said he was looking for more concrete signs of a halt to the fighting. And for that, he was looking to President Donald Trump.
"Trust in the market's rally, at this junction, requires trust in Trump alone," Wizman said. "No other party in the conflict or peripheral to the conflict has been equally vocally confident in the prospect of peace through superior firepower."
That seems a new take on rallies based on Trump's comments and negotiating tactics, which Wall Street has come to refer to as the "TACO" trade - an acronym for "Trump always chickens out."
Don't miss: How the 'TACO' trade went from a lighthearted Wall Street joke to a serious moneymaker.
The jump in travel stocks comes as executives say travel demand remains strong, despite the pressure that higher oil prices have put on margins. Airlines have raised checked-bag fees and tried to court wealthier customers to offset that pressure.
Delta Air Lines $(DAL)$ CEO Ed Bastian said earlier this month that the airline had taken steps to "meaningfully" reduce flight-capacity growth - broadly, an airline's available supply of seats and flight coverage - until fuel prices settle. Last month, United said it would pull more flights from its schedules, amounting to 5 percentage points from its capacity this year, as it braces for oil to stay above $100 through next year, according to Reuters.
"While U.S. carriers have not signaled any cracks in demand yet, we are starting to see unprofitable capacity pulled from the system," Jefferies analyst Sheila Kahyaoglu said in a recent research note.
Retail and travel names rallied earlier this month after the U.S. and Iran agreed to a two-week cease-fire. Trump on Thursday also announced a 10-day ceasefire in Lebanon, which had been under attack from Israel. However, it could also take months before consumers see lower prices at gas stations and grocery stores, barring any additional turmoil in the Middle East.
Trump, in a post on Truth Social on Friday, said "the Strait of Hormuz is completely open and ready for business." Iran's foreign minister said that in conjunction with the cease-fire in Lebanon, "the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire."
Still, Wizman said that a bigger truce was needed to calm markets, particularly over Iran's nuclear program.
"To be sure, a concession by Iran to guarantee safe passage through the Strait of Hormuz would be meaningful for sentiment and would boost global stocks again as crude-oil prices fell," he said. "But to get a durable peace, the concession needed would have to come in regard to denuclearization of Iran."
-Bill Peters
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April 17, 2026 13:38 ET (17:38 GMT)
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