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Stocks Rally on Iran Peace Deal Prospects as Oil Prices Slide

U.S. equity markets extended gains Friday as traders bet on a potential ceasefire agreement between Washington and Tehran. A lasting peace deal could restore traffic through the Strait of Hormuz, a critical chokepoint for global energy supplies currently disrupted by regional tensions.

Oil prices have fallen 20 percent from recent peaks on optimism surrounding the negotiations. Market participants remain divided on the timeline for reopening shipping lanes, with some skeptical that normal operations could resume within one month of an agreement, despite diplomatic projections.

The rally reflects broader investor sentiment that geopolitical de-escalation will support corporate earnings and economic growth. Stock momentum is accelerating as multiple positive catalysts converge, setting the market toward a historic weekly performance streak.