Stocks finished the week on a high note, with all three major indexes jumping more than 1% after Iran said the Strait of Hormuz was now "completely open." That announcement followed news of a 10-day ceasefire agreement between Israel and Lebanon.
Both the S&P 500 and the Nasdaq Composite indexes hit all-time highs again. For the S&P 500, it was its 13th gain in the last 14 sessions, while the Nasdaq has now gained for 14 sessions in a row.
It's unclear if the detente will hold, as the ceasefire agreements are temporary and the U.S. is still imposing a blockade on Iranian ships coming in and out of the Strait.
Still, the reopening announcement sent oil prices plunging, with a barrel of Brent crude down 9.8% to $82.21, and oil prices could continue to ease if the situation improves. If you're looking to capitalize on the situation, here's one ETF to buy now.
Image source: Getty Images.
This ticker could soar on the Iran war unwind
It's not surprising that stocks are soaring as oil prices come down and the Strait of Hormuz reopens.
Oil prices influence a wide range of industries beyond energy and transportation, including retail, agriculture, and any other industry that depends on moving goods or using vehicles or heavy machinery.
It also has an impact on macroeconomics, and that's been felt acutely in Asian countries like China, Japan, and South Korea, which are heavily dependent on oil and gas coming out of the Strait of Hormuz.
South Korea gets roughly 60% to 70% of its crude oil through the Strait of Hormuz, and Korean stocks fell sharply on the Iran war.
The iShares MSCI South Korea ETF (EWY +0.11%) lost more than 20% during the war, but has surged back, reaching an all-time high on Friday.
NYSEMKT: EWY
Key Data Points
The EWY ETF was one of the top-performing ETFs last year, nearly doubling on the strength of the boom in memory chips as its two biggest components, Samsung and SK Hynix, are two of the biggest memory-chip producers in the world.
Prior to the Iran war, the ETF was up more than 50%, and it looks poised to surge further if the conflict moves toward peace, as memory chip demand is expected to remain strong at least through 2027. Additionally, Korean stocks are benefiting from more shareholder-friendly corporate governance policies, and the ETF is still significantly cheaper than the S&P 500 at a price-to-earnings ratio of 20.4.
The EWY ETF had plenty of momentum before the war, and that's likely to come back as war-related concerns fade.
