Stocks Surge to Fresh Records as Oil Plunge Fuels Broad-Based Rally

The stock market capped a powerful week on a strong note, with falling energy prices, improving rate-cut expectations, and expanding participation driving equities deeper into record territory. The S&P 500 (+1.2%) and Nasdaq Composite (+1.5%) both posted fresh intraday and closing highs for a third consecutive session, while the Nasdaq extended its winning streak to 13 straight gains—its longest run since 1992.

Broader participation was a defining feature of today’s rally. The Dow Jones Industrial Average (+1.8%) outperformed, while rate-sensitive segments surged, sending the Russell 2000 (+2.1%) and S&P MidCap 400 (+2.0%) sharply higher.

The catalyst came early. Markets opened with strong gains after Iran’s foreign minister confirmed that the Strait of Hormuz would reopen to commercial traffic for the remainder of the ceasefire period. Additional headlines reinforced optimism, including reports that U.S.–Iran talks could resume shortly and confirmation from Donald Trump that Iran has suspended its nuclear program indefinitely.

Oil prices responded decisively. Crude oil futures plunged $10.49 (-11.1%) to $84.22 per barrel, removing a key overhang on inflation expectations and unlocking risk appetite across equities.

The decline in oil sparked a powerful rotation into economically sensitive areas. The consumer discretionary sector (+2.0%) and industrials sector (+1.8%) led the advance, supported by sharp gains in travel-related names such as United Airlines and Royal Caribbean. Lower fuel costs also boosted sentiment across airlines, cruise operators, and logistics-sensitive industries.

Rate-sensitive groups added further momentum. Homebuilders and construction-related stocks rallied strongly, with the iShares U.S. Home Construction ETF jumping 4.6%. The pullback in oil prices eased inflation concerns, prompting a notable shift in monetary policy expectations. According to the CME Group FedWatch tool, the probability of a December rate cut rose to roughly 50%, up from around 30% just a day earlier.

Technology also remained a pillar of strength. The information technology sector (+1.6%) kept pace with the broader rally, driven by gains in semiconductor stocks that pushed the PHLX Semiconductor Index 2.4% higher. Apple stood out among mega-cap names after reports of a 20% increase in iPhone shipments in China during the first quarter.

The communication services sector (+0.8%) lagged slightly due to a sharp drop in Netflix following disappointing guidance. However, strength in Alphabet and Meta Platforms helped the sector recover from intraday lows. The Vanguard Mega Cap Growth ETF rose 1.4%, reflecting continued leadership from large-cap growth stocks.

Only two sectors finished in negative territory. The energy sector (-2.9%) declined in response to the sharp drop in oil prices, while the utilities sector (-0.4%) also slipped as investors rotated away from defensive positioning.

Momentum remains firmly positive. The major averages have now posted gains of at least 3% for three consecutive weeks, highlighting the strength and persistence of the current uptrend.

With geopolitical tensions easing, oil prices retreating, and rate-cut expectations improving, the macro backdrop has shifted decisively in favor of equities. The key question now is whether this rally can sustain its breadth and carry markets further into record territory as earnings season unfolds.

Our FTinvest 11 model portfolio gained 1.29% to close at 1,013.42, building on yesterday’s breakout above the 1,000 level and continuing its strong upward momentum. The portfolio is now firmly back in four-digit territory, moving closer to its all-time high of 1,039.51.

Based on the start-of-year level of 928.18, FTinvest 11 is now up approximately +9.18% year-to-date, highlighting a robust recovery from the March correction. The continued advance underscores the portfolio’s resilience and the strength of its disciplined, value-driven approach as it regains traction in Q2.