S&P 500 ETF Up 2.3% as Brent Crude Plunges 13% on Hormuz Ceasefire
The S&P 500 ETF climbed 2.3% as Brent crude futures plunged over 13% to $94 per barrel after a two-week ceasefire restored Strait of Hormuz shipping. Delta Air Lines shares jumped following Q1 earnings that exceeded expectations, driven by strength in its premium travel segment.
1. Market Rally on Strait of Hormuz Ceasefire
After a two-week ceasefire deal restored safe passage through the Strait of Hormuz, US stock benchmarks rebounded sharply. The S&P 500 climbed 2.3%, the Nasdaq Composite jumped 2.8%, and the Dow rose over 1,000 points (2.5%) on renewed risk appetite.
2. Oil Price Collapse Details
Brent crude futures tumbled over 13% to $94 per barrel, while WTI dropped nearly 15% to $95 per barrel, as vessels resumed transit in the world’s most critical oil shipping lane. The rapid oil selloff alleviated concerns over persistent energy supply disruptions.
3. Fed Rate-Cut Expectations Rise
The sharp decline in oil prices prompted traders to increase bets on Federal Reserve rate cuts later this year, given reduced inflationary pressures. Market-implied yields on Fed funds futures shifted to reflect a greater than 50% chance of rate reductions by year-end.
4. Corporate Spotlight: Delta Air Lines
In corporate news, Delta Air Lines shares rose after reporting Q1 earnings that topped analyst forecasts, with growth in its premium travel segment offsetting higher fuel costs. The airline said elevated demand for its first-class and business cabins will sustain margins through the summer.