Wall Street gets a lift as oil drops on hopes for Hormuz reopening

Stocks in the US finished the week higher as the price of oil fell on hopes for the reopening of the Strait of Hormuz in Iran. — AFP pic

First Published: Saturday, 26 Sep 2026 9:03 AM MYT

Last Modified: Saturday, 26 Sep 2026 9:11 AM MYT

NEW YORK, Sept 26 — Wall Street stocks bounced Friday to finish a volatile week on a positive note, greeting a drop in oil prices on hopes for a US-Iran agreement that could lead to the reopening of the Strait of Hormuz.

Markets weighed mixed signals from the UN General Assembly in New York this week on the state of play between Washington and Tehran.

While both US President Donald Trump and Iranian President Masoud Pezeshkian included tough rhetoric against each other in UN addresses, Iranian Foreign Minister Abbas Araghchi proposed a plan that would include the reopening of the Strait of Hormuz within seven days.

“It is a dubious offer considering Iran hasn’t changed its conditions from before,” said Patrick O’Hare, an analyst at Briefing.com. “We’ll see how long the glow of Iran’s offer lasts.”

But Angelo Kourkafas of Edward Jones said “there is some hope for a diplomatic way to the war in the Middle East with oil prices falling a little bit today.”

Investors seemed to settle on a glass-half-full perspective, leading to a more two per cent drop in oil prices, while major US stock indices were in positive territory most of the day.

The broad-based S&P 500 finished up 0.5 per cent.

“We have a tug-of-war between rising interest rates and volatile energy prices against very solid corporate and economic fundamentals,” Kourkafas said.

Inflation fears from the Strait of Hormuz closure, alongside the risk of further Gulf supply cuts due to Houthi strikes on Saudi infrastructure on the Red Sea, have again pushed up government bond yields, with investors demanding higher returns for lending money.

The benchmark US 10-year Treasury yield hit its highest level since 2007 on Thursday, and Japan’s government bond yields also hit multi-year highs.

Bank of England Governor Andrew Bailey hinted meanwhile that it could also follow the European Central Bank and US Federal Reserve in hiking interest rates in the coming months, which could curtail inflation but slow economic growth.

As for equities, “a seemingly amicable meeting” between US President Donald Trump and his Chinese counterpart Xi Jinping in Washington helped lift investor sentiment, said Dan Coatsworth, head of markets at AJ Bell.

However, the nations’ extension of a trade truce by two months until January was far less than the two years the Chinese had hoped for.

“US-China trade risks remain... (with) issues over tariffs, agricultural purchases, rare earths, and technology restrictions unresolved,” said MUFG market strategist Lloyd Chan.

Trump said he discussed the stalled Iran war with Xi, and the two leaders confirmed that they would meet for a third and fourth time this year at international summits in China and the United States.

Key figures at around 2015 GMT 

Brent North Sea Crude: DOWN 2.1 per cent at US$104.32 per barrel (RM425.03)

West Texas Intermediate: DOWN 2.3 per cent at US$92.41 per barrel (RM376.44)

New York — Dow: UP 0.9 per cent at 51,828.62 (close)

New York —  S&P 500: UP 0.5 per cent at 7,743.41 (close)

New York —  Nasdaq: UP 0.5 per cent at 27,068.72 (close)

London —  FTSE 100: UP 0.1 per cent at 10,695.25 (close)

Paris —  CAC 40: FLAT at 8,077.80 (close)

Frankfurt —  DAX: UP 0.6 per cent at 25,408.64 (close)

Tokyo —  Nikkei 225: UP 1.3 per cent at 66,364.20 (close)

Hong Kong —  Hang Seng Index: DOWN 1.0 per cent at 24,510.09 (close)