The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite climbed to new record highs. Falling oil prices eased inflation concerns and improved investor sentiment across the market.
Brent crude is on track for a monthly decline of approximately 17% in May. This represents the global benchmark's largest monthly percentage drop since 2020. Oil prices reached a six-week low during the recent downturn.
Optimism regarding a potential U.S.-Iran ceasefire agreement drove the decline in energy costs. A deal could lead to the reopening of the Strait of Hormuz to global oil supply. The conflict previously disrupted this critical shipping channel.
The prospect of increased supply boosted companies with high fuel expenses. Shares of airlines and cruise lines rallied on the news.