U.S. stocks jumped on April 17,closing on a very healthy note to end the week after Iran said the Strait of Hormuz will stay operational during the Israel-Lebanon ceasefire.
That eased fears of a major oil supply shock. The Dow rose more than 900 points, the S&P 500 climbed above 7,100 for the first time, and the Nasdaq also hit a fresh intraday high. At the same time, oil prices are now in freefall. Brent crude fell to about $88.90 a barrel and U.S. crude dropped to about $83.08.
Do not confuse this as a simple relief rally.
Investors quickly started moving out of oil stocks and into other areas that will benefit from the rebound. That is the real story. Wall Street is now wondering if the next big winners in the market will be airlines, cruise lines, and consumer stocks. Energy stocks, on the other hand, are losing some of the edge they had during the recent rise in oil prices.
If all the i’s are dotted and t’s are crossed, then oil stocks will emerge as the biggest losers since they are tied most closely to higher crude prices.
Valero Energy (VLO) was down about 7.1% on the day. APA Corp. (APA) fell about 5.9%. Exxon Mobil (XOM) dropped about 3.7%, while Chevron (CVX) lost about 2.4%. That means that investors hit the companies that were more affected by oil prices harder, while the biggest integrated oil companies did a little better.
Related: Exxon Mobil stock just got a warning Wall Street can’t ignore
Why does that matter?
Because for energy stocks, the story is simple and straightforward. If shipping through Hormuz stayed under pressure, the price of oil would be riding high, and producers would keep winning. Iran’s move did not end all the risk, but it did weaken the thesis significantly.
This doesn’t mean that the oil story is over, though. The U.S. Energy Information Administration said in its April outlook that Brent could still be very high this year, peaking at about $115 in the second quarter and then dropping to about $88 in the fourth quarter as supply slowly comes back. Reuters also reported thatGoldman Sachs slashed its second-quarter 2026 oil forecast to $90 for Brent and $87 for U.S. crude.
That means Friday’s drop may be a reset, not a collapse.
If oil keeps falling, travel stocks will end up becoming the biggest gainers.
Royal Caribbean (RCL) was up about 7.9%, and United Airlines (UAL) gained about 6.9% as the markets focus on lower fuel costs helping profits. This market move is important for more than just oil. Cheaper energy can help lower inflation, ease the burden on consumers, and make travel and other businesses that depend on fuel more appealing.
