West Texas Intermediate futures

The U.S. Navy seized an Iranian-flagged cargo ship in the Gulf of Oman on Sunday, disabling its engine with gunfire after the vessel ignored warnings to comply with a maritime blockade.

The guided-missile destroyer USS Spruance intercepted the M/V Touska as it headed toward Bandar Abbas, ordering the crew to evacuate the engine room before firing multiple rounds from its 5-inch gun. Marines from the 31st Marine Expeditionary Unit later boarded the ship, which remains in U.S. Custody. President Donald Trump confirmed the action on Truth Social, stating the vessel was under U.S. Treasury sanctions due to prior illegal activity and that the Navy “stopped them right in their tracks by blowing a hole in the engineroom.”

Oil prices jumped in response, with West Texas Intermediate futures rising 5% to above $88 per barrel and Brent crude advancing 5% to over $94 per barrel. The move followed a weekend of escalating tensions in the Strait of Hormuz, where the Islamic Revolutionary Guard Corps declared the waterway closed to all vessels despite earlier U.S.-Iran announcements of reopened shipping.

Stock markets reacted mildly to the developments, with the Dow Jones Industrial Average slipping 23 points, or 0.1%, while the S&P 500 fell 0.3% and the Nasdaq Composite retreated 0.4% on Monday. Traders noted that equities had recovered from near correction territory to all-time highs, making it difficult to fully price in a worst-case scenario. David Wagner, head of equities at Aptus Capital Advisors, told CNBC that “the war with Iran is now in the rearview mirror for the market,” citing confidence in a eventual compromise.

The seizure came after Iran declined to join another round of U.S.-led peace talks in Pakistan. Trump reiterated that the U.S. Naval blockade of the Strait of Hormuz would remain until Iran agreed to American demands, even as Iranian state media accused the U.S. Of failing to meet its obligations under a prior ceasefire with Lebanon that had briefly reopened the strait.

Wall Street was coming off a strong week, with the S&P 500 gaining 4.5% and the Nasdaq Composite rising around 7%, marking its 13th consecutive winning session—a streak not seen since 1992. Software stocks led gains, with the iShares Expanded Tech-Software Sector ETF (IGV) up 0.8%. Wagner argued that the rally had further room to run, driven by earnings growth and valuation expansion rather than speculative excess.

Key Detail The USS Spruance used its 5-inch gun to disable the M/V Touska’s propulsion system after a six-hour standoff, marking the first direct U.S. Navy seizure of an Iranian vessel under the current Hormuz blockade.

Why did oil prices rise despite the stock market’s muted reaction?

Oil prices spiked due to immediate supply concerns from the Strait of Hormuz conflict, while equity investors focused on longer-term earnings trends and the belief that a diplomatic resolution would eventually prevent sustained disruption.

What does the 13th consecutive winning session for the Nasdaq suggest about market sentiment?

The streak, matching a run not seen since 1992, reflects underlying confidence in corporate earnings and growth prospects, with analysts like David Wagner arguing that valuations are supported by fundamentals rather than speculation.

U.S. Stocks surged on Friday as Iran declared the Strait of Hormuz “completely open” for commercial shipping, easing fears of prolonged supply chain disruption in a key global oil artery.

The Dow Jones Industrial Average climbed 851 points, or 1.8%, while the S&P 500 rose 1.1% to surpass 7,100 for the first time in its history, reaching a new intraday high. The Nasdaq Composite gained 1.3%, and the Russell 2000 small-cap index added 2%, also hitting a fresh peak.

The market rally followed a post on X by Iranian Foreign Minister Seyed Abbas Araghchi, who stated that passage for all commercial vessels through the strait was declared open in line with a ceasefire between Israel and Lebanon that began at 5 p.m. ET on Thursday.

Oil prices dropped sharply in response, with U.S. West Texas Intermediate futures falling 10.9% to $84.36 a barrel and international Brent crude declining 8.9% to $90.05 a barrel, according to oilprice.com data cited by CBS News.

The decline translated to relief at the pump, where the national average price for regular gasoline fell to $4.08 per gallon on Friday, down from $4.17 on April 9, the highest level of the year, AAA reported.

Despite the opening, Iran’s Tasnim news agency warned that ships and cargoes linked to hostile nations would not be permitted to transit, and the strait could be closed again if the U.S. Naval blockade of Iranian ports continues.

President Donald Trump affirmed the blockade would remain “in full force” until a peace agreement with Tehran is reached, though he said the process should proceed quickly as most points were already negotiated.

Trump also claimed Iran had agreed to never close the waterway again and told Bloomberg that a deal to end the war was mostly complete, including an indefinite suspension of Iran’s nuclear program.

For more on this story, see U.S. Stock Futures Jump as Iran Opens Strait of Hormuz.

Stocks in industries sensitive to strait disruptions rebounded, with Boeing shares up 3% and Royal Caribbean advancing 8%, while Amazon and Airbnb also gained.

Anthony Saglimbene, chief market strategist at Ameriprise Financial, said investors were moving past worst-case scenarios and now see a path to lasting stability in the region, which markets are beginning to price in.

The Strait of Hormuz remains a critical chokepoint, through which about one-fifth of the world’s oil supply normally flows, and prior to the ceasefire, traffic slowdowns had pushed oil prices close to $120 a barrel.

Key Context The U.S. Central Command reported that 19 Iranian vessels had complied with U.S. Forces to turn around and return to Iran since the blockade began earlier in the week.

Trump credited Iran for reopening the strait while maintaining sanctions pressure

In a Truth Social post, Trump thanked Iran for declaring the strait open and said the U.S. Navy’s blockade of Iranian ports would continue until a broader peace agreement is achieved, linking economic pressure to diplomatic progress.

Market analysts note shift from risk-off to cautious optimism

Saglimbene observed that the market had retreated from pricing in extreme conflict outcomes and now sees a negotiable path forward, provided the strait remains open and hostilities do not reignite.

Gasoline prices fell to their lowest level since early April

The drop in crude prices brought the national average for regular gasoline down to $4.08 per gallon, offering consumers relief after a spike tied to Middle East tensions that began in late February.

LIVE: Stocks surge as Iran says Strait of Hormuz 'completely open' | Apr. 17, 2026

Why did oil prices drop after Iran’s announcement?

Oil prices fell because Iran’s declaration reduced fears of a prolonged closure of the Strait of Hormuz, a vital route for global oil shipments, easing supply concerns that had driven prices up earlier in the year.

Is the Strait of Hormuz now fully open to all shipping?

No, Iran stated that while commercial vessels can transit, ships linked to hostile nations are barred, and the strait could be closed again if the U.S. Blockade of Iranian ports continues.