US stock markets surged to fresh record highs as easing geopolitical tensions triggered a sharp decline in oil prices, boosting investor confidence across global markets. Sentiment improved after reports of the reopening of the Strait of Hormuz, easing concerns over potential disruptions to global oil supply.

The rally was led by the S&P 500, which climbed 1.2% to close at a record 7,126.07, while the tech-heavy Nasdaq Composite gained 1.5% to settle at 24,468.48—both marking their third consecutive record close. The Dow Jones Industrial Average also posted strong gains, rising over 600 points as investors returned to equities amid improving risk appetite.

Oil prices fell sharply on expectations of stable supply flows, helping ease inflation concerns and lifting hopes of potential interest rate cuts by the US Federal Reserve. Lower energy costs are typically supportive for businesses and consumers, further strengthening market sentiment. Analysts say the combination of easing tensions, softer oil prices, and strong tech performance could continue to support global equities in the near term.