Dow Rises 868 Points Amid Gulf Ceasefire: Stock Market Today

Oil tanker operations at Mutrah port combined with digital stock chart market instability in the Gulf region

Crude oil prices collapsed and stock prices surged Friday after Iran declared the Strait of Hormuz "completely open" in a post on X, citing a ceasefire in Lebanon. The Nasdaq Composite is now on its longest winning streak since 1992, as the tech-heavy index and the S&P 500 hit new all-time closing highs, while the Dow Jones Industrial Average rallied to within another good day's climb of its own fresh peak.

Passage for all commercial vessels through the Strait of Hormuz is "open for the remaining period of ceasefire" between Lebanon and Israel, Iranian Foreign Minister Seyed Abbas Araghchi said before the opening bell.

President Donald Trump, who announced the 10-day Lebanon-Israel ceasefire Thursday evening, followed with a "FULLY OPEN AND READY FOR FULL PASSAGE" Truth Social post. Trump also said a U.S. naval blockade of the Strait "will remain in full force" until a deal with Iran is agreed.

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The ceasefire in Lebanon held up through Friday's trading session. A separate ceasefire between the U.S. and Iran is scheduled to end on April 21. According to Axios, the U.S. and Iran will meet in Pakistan as early as Sunday.

The front-month West Texas Intermediate crude oil futures contract fell 8.8% to $83.13 per barrel, while Brent crude oil futures, a global benchmark, dropped 8.8% to $90.62. WTI is up 34% since the war between the U.S., Israel and Iran began on February 28, Brent 25%.

Here are three things you can do now in response to volatile crude oil prices.

Odds of a rate cut rise

By the closing bell, the Nasdaq Composite was up 1.5% at 24,468, ending the week with a gain of 6.8% and extending its winning streak to 13. The S&P 500 was higher by 1.2% for the day and 4.5% for the week at 7,126, breaking the 7,100 level in the process.

The blue-chip Dow Jones Industrial Average had added 1.8% to 49,447, with 27 of 30 Dow Jones stocks closing in positive territory. Papa Dow was up 3.2% for the week, and is within 2.2% and 1.5% of its February 10 all-time intraday and closing highs of 50,512 and 50,188, respectively.

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"This wave of optimism has been enough to carry U.S. stocks to fresh highs as the S&P 500 crosses 7,100 for the first time," Hargreaves Lansdowne Head of Equity Research Derren Nathan observes. Nathan notes that interest rates are declining on the potential for a less severe impact on inflation from the Middle East energy shock.

Indeed, the 10-year U.S. Treasury yield was down to 4.244% from 4.309% on Thursday, and CME FedWatch shows the probability the federal funds rate remains at 3.50% to 3.75% through 2026 falling from above 70% on Thursday to less than 50% on Friday.

Still, as Nathan concludes, "Markets will want to see decisive action towards a durable peace if this shift is to be anything more than temporary."

Is Netflix on sale?

Netflix (NFLX, -9.7%) looks a lot cheaper these days simply because of the stock's 10-for-1 split in November. After sliding on a perfect storm of soft guidance and somewhat surprising moves in the C-suite, the streaming giant actually might be a bargain at current levels.

UBS analyst John Hodulik saw upside of 20.6% for NFLX based on its April 16 closing price, even after the communication services stock shared weak second-quarter guidance along with expectations-beating first-quarter results. "No upside to guidance is a disappointment," Hodulik said, "but we still believe operational momentum is strong."

Meanwhile, co-founder and board chair Reed Hastings will leave Netflix in June. Hodulik didn't comment specifically on the change at the top, but he did identify "Netflix as THE industry leader in streaming video." The analyst sees sentiment on the stock improving "as Netflix's growth prospects, monetization opportunity and competitive moat come back into focus."

Upside from here now looks like 34.4% after Friday's price action. Hodulik, who reiterated his Buy rating on the stock, sees NFLX trading at $130 12 months from now.

"We believe a wider range of content and investments in live events will support engagement," the analyst concludes, "while Netflix's price per hour of viewership still sits at the lower end of peers."

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David Dittman is the former managing editor and chief investment strategist of Utility Forecaster, which was named one of "10 investment newsletters to read besides Buffett's" in 2015. A graduate of the University of California, San Diego, and the Villanova University School of Law, and a former stockbroker, David has been working in financial media for more than 20 years.