Oil prices drop 9% and Wall Street rallies to a record after Iran reopens the Strait of Hormuz

NEW YORK (AP) — Oil prices dropped back to where they were in the early days of the Iran war, and U.S. stocks raced to another record Friday after Iran said the Strait of Hormuz is open again for commercial tankers carrying crude from the Persian Gulf to customers worldwide.

The S&P 500 leaped 1.2% to an all-time high and closed out a third straight week of big gains, its longest streak since Halloween. A freer flow of oil could take pressure off prices not only for gasoline but also for groceries and all kinds of other products that get moved by vehicles. It could even ultimately help people pay less on credit-card interest and mortgage bills.

The Dow Jones Industrial Average surged as many as 1,100 points before paring its gain to 868, or 1.8%. The Nasdaq composite climbed 1.5%.

The U.S. stock market has jumped more than 12% since hitting a bottom in late March on hopes 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 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 the price for U.S. oil dropped 9.4% to settle at $82.59 per barrel.

Brent crude, the international standard, fell 9.1% to settle at $90.38 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 deteriorated into 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 Strait of Hormuz’s reopening, Trump said on his social media network that the U.S. Navy’s blockade of Iranian ports remains “in full force” until both sides reach a deal on the war. He, though, also suggested 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 flew 7.1% higher, and Southwest Airlines climbed 5.1%. A day earlier, the head of the International Energy Agency had said that Europe has “maybe six weeks or so” of remaining jet fuel supplies.

Operators of cruise ships, which guzzle fuel, also steamed higher. Royal Caribbean Group gained 7.3%, and Carnival rose 7%.

Housing and auto-related companies likewise got some relief from the drop in oil prices.

With less threat of high inflation hurting the economy, a sustained drop in oil prices could convince the Federal Reserve to resume its cuts to interest rates to help the economy. The yield on the 10-year Treasury sank to 4.24% from 4.32% late Thursday, and lower yields can bring down rates for mortgages and other loans going to U.S. households and businesses.

Builders FirstSource, a supplier of windows and other products, rose 5.5%, and homebuilder PulteGroup gained 5% on hopes that lower mortgage rates will spur more people to buy houses. Carvana climbed 7% because lower loan rates can get more customers into new autos.

A strong start to the earnings reporting season for big U.S. companies has also helped support the U.S. stock market, and more financial companies joined the list delivering bigger profits for the start of 2026 than analysts expected.

State Street rose 2.5%, and Fifth Third Bancorp added 1.7% after both reported better results for the latest quarter than expected.

They helped offset a 9.7% slide for Netflix, which fell even though it delivered a better profit than expected. It did not raise its forecast for revenue growth for the full year, which analysts said may have disappointed some investors.

It also said Reed Hastings, cofounder and chairman of the streaming company, will step down from its board of directors in June when his term expires.

All told, the S&P 500 rose 84.78 points to 7,126.06. The Dow Jones Industrial Average jumped 868.71 to 49,447.43, and the Nasdaq composite climbed 365.78 to 24,468.48.

In stock markets abroad, stock indexes leaped in Europe following Iran’s announcement about the Strait of Hormuz. France’s CAC 40 jumped 2%, and Germany’s DAX returned 2.3%.

In Asia, where trading finished for the day before the announcement, indexes were weaker. Japan’s Nikkei 225 lost 1.8%, and Hong Kong’s Hang Seng fell 0.9% for two of the bigger losses.

AP Business Writers Chan Ho-him and Matt Ott contributed to this report.

People work on the floor at the New York Stock Exchange in New York, Monday, April 13, 2026. (AP Photo/Seth Wenig)

People work on the floor at the New York Stock Exchange in New York, Monday, April 13, 2026. (AP Photo/Seth Wenig)

People work on the floor at the New York Stock Exchange in New York, Monday, April 13, 2026. (AP Photo/Seth Wenig)

A currency trader talks on the phone near a screen showing the Korea Composite Stock Price Index (KOSPI), top center, and the foreign exchange rate between U.S. dollar and South Korean won, top center left, at the foreign exchange dealing room of the Hana Bank headquarters, in Seoul, South Korea, Friday, April 17, 2026. (AP Photo/Ahn Young-joon)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), top center, and the foreign exchange rate between U.S. dollar and South Korean won, top center left, at the foreign exchange dealing room of the Hana Bank headquarters, in Seoul, South Korea, Friday, April 17, 2026. (AP Photo/Ahn Young-joon)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), right, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters, in Seoul, South Korea, Friday, April 17, 2026. (AP Photo/Ahn Young-joon)

TEL AVIV, Israel (AP) — A Palestinian man with Israeli citizenship went on a shooting rampage in several towns in central Israel on Sunday, killing one person and wounding five others, according to Israeli police. The attacker was killed by police.

The attack came at a time of heightened tensions following a spate of Israeli settler attacks, and the deadly shooting of a Palestinian baby over the weekend, in the nearby West Bank. Police identified the attacker as a resident of the Arab town of Taybeh in his 20s, but his precise motives were not immediately known.

The attack began with a shooting Sunday morning at a gas station near the town of Kokhav Yair, located on the Israeli side of the boundary with the occupied West Bank. Several other shootings were reported in two nearby Israeli towns and close to the Israeli settlement of Salit, inside the West Bank.

Police initially feared a series of coordinated attacks but eventually determined that a gunman and an accomplice who may have served as his driver were involved. The suspected accomplice was arrested later after he tried to stab police with a glass bottle.

Police said a 35-year-old Israeli man was killed by the gunman in Kokhav Yair, while the Magen David Adom rescue service said five other people were wounded, two severely.

Fears of a widespread attack prompted authorities to order residents to stay at home, and children in the area were kept in lockdown at school for at least three hours.

“Since Oct. 7, the scenario we were expecting was terrorists crossing into our towns from over the boundary. I don’t think that anyone imagined that we would discover the attackers were Israeli citizens,” Oshrit Gani Gonen, the regional council head, told Israeli media, referring to the Hamas-led attack on southern Israel on Oct. 7, 2023, that sparked the war in Gaza.

Prime Minister Benjamin Netanyahu praised the security forces who killed the attacker, while Israel’s hard-line public security minister, Itamar Ben-Gvir, who oversees the police force, released a video of himself standing next to what appeared to be a blurred image of the dead gunman.

“This is the end of every terrorist, this is how it should look,” said Ben-Gvir, who recently led an effort to pass a new law that seeks to impose the death penalty on Palestinian attackers. That law faces legal challenges.

Ben-Gvir has come under sharp condemnation from other Israeli leaders for making controversial videos, such as his treatment of flotilla activists who were detained after attempting to break the maritime blockade to Gaza.

The West Bank has experienced a surge in deadly violence since the war in Gaza began. Israel has stepped up military operations across the territory, killing hundreds of people. It says raids are aimed at militants, but scores of civilians have also been killed.

The Oct. 7 attack killed around 1,200 people and took 251 as hostages. Israel’s ensuing offensive in Gaza has killed more than 72,000 Palestinians, including combatants and civilians, according to the Gaza Health Ministry. The ministry, part of the Hamas-led government, maintains detailed casualty records that are seen as generally reliable by U.N. agencies and independent experts. It does not give a breakdown of civilians and militants.

Also on Sunday, at least four Palestinians were killed in an Israeli airstrike that hit a police point in Gaza's southern city of Khan Younis, according to the Palestinian Red Crescent. The dead were taken to a field hospital run by the Red Crescent. At least 10 others were wounded, the charity said.

The Israeli military did not immediately comment on the strike but has said in the past it will target militants that pose a threat to its troops.

The Oct. 10 U.S.-brokered ceasefire deal attempted to halt the war between Israel and Hamas. While the heaviest fighting has subsided, the ceasefire has seen almost daily Israeli fire.

Meanwhile, Netanyahu in a Cabinet meeting repeated his pledge to take 70% of Gaza: “We are presently holding more than 60% of the territory, and soon we will reach 70%.” He added that Israel is not allowing Hamas to “rearm or harm us,” in comments released to the media.

The head of the U.S.-created Board of Peace that oversees the ceasefire acknowledged last month that next steps in the truce have stalled over the key issue of disarming Hamas.

Associated Press writer Samy Magdy in Cairo contributed to this report.

A previous version of this story was corrected to show that the location where the Israeli man was killed was on the Israeli side of the boundary with the Israel-occupied West Bank, not inside the West Bank.

Blood stains are visible at the scene of what Israeli police say was a series of shooting attacks carried out by a Palestinian citizen of Israel in Kochav Yair, central Israel, Sunday, June 7, 2026. (AP Photo/Ariel Schalit)

Israeli security forces and ZAKA rescue service volunteers respond at the scene of a shooting attack carried out by a Palestinian citizen of Israel near Tzur Yitzhak in central Israel, Sunday, June 7, 2026. (AP Photo/Ariel Schalit)

Israeli security forces and ZAKA rescue service volunteers respond at the scene of a shooting attack carried out by a Palestinian citizen of Israel near Tzur Yitzhak in central Israel, Sunday, June 7, 2026. (AP Photo/Ariel Schalit)

Israeli police officers are deployed at the scene of a shooting attack carried out by a Palestinian citizen of Israel near Tzur Yitzhak in central Israel, Sunday, June 7, 2026. (AP Photo/Ariel Schalit)

Israeli security forces are deployed at the scene of a shooting attack carried out by a Palestinian citizen of Israel near Tzur Yitzhak in central Israel, Sunday, June 7, 2026. (AP Photo/Ariel Schalit)

Israeli security forces are deployed at the scene of a shooting attack carried out by a Palestinian citizen of Israel near Tzur Yitzhak in central Israel, Sunday, June 7, 2026. (AP Photo/Ariel Schalit)