US stock indices rose to new records on Friday after Iran stated that it opened the Strait of Hormuz for non-Iranian commercial vessels, easing concerns of energy-driven stagflation. The S&P 500 gained 1.2% and the Nasdaq 100 gained 1.5%, and the Dow 1.9%. Crude oil and product prices plunged after Iran and President Trump stated that tanker traffic in the Persian chokepoint is now liberated, paving the way to restore normal levels of energy supply following the shock triggered by the conflict. The likelihood of an agreement was magnified after the President stated Iran will shut down its nuclear program. AI companies surged as the rebound in risk sentiment supported speculative sectors, with Amazon, Microsoft, Nvidia, and Tesla gaining more than 1%, while Oracle fell more than 3%. In turn, Netflix fell over 10% after its Q2 guidance fell short of expectations. The three main averages were on track for three consecutive weeks of gains above 3%.
The DAX jumped more than 2% to close near 24,700 on Friday, its highest level since February 27. The sharp rebound followed signals from US President Donald Trump suggesting the war could be nearing an end, adding to improving risk sentiment. Sentiment was further supported by a 10-day ceasefire between Israel and Lebanon that came into effect on Thursday, helping lift global equity markets. Infineon surged more than 6%, while Airbus gained nearly 5%. Siemens and Siemens Energy both advanced over 3%, and SAP along with Deutsche Bank rose more than 2.5%. Gains were also seen in Deutsche Telekom, Allianz and Munich Re. In contrast, utilities and select industrial names lagged, with RWE falling 4% and E.ON down nearly 2%. Mercedes-Benz slipped close to 2%, while Rheinmetall edged 0.6% lower.
