Wall Street eyes inflation as war rattles markets

Wall Street is heading into a critical week as investors closely watch upcoming inflation data and early corporate earnings for signs of how rising oil prices and geopolitical tensions are impacting the economy.

Markets remain highly sensitive to developments linked to the Middle East conflict, which has driven energy prices higher and added uncertainty to global financial conditions, News.Az reports, citing Reuters.

The upcoming U.S. consumer price index (CPI), due on April 10, is expected to provide the first clear indication of how the recent surge in oil prices is feeding into inflation.

Analysts forecast a monthly increase of around 0.9% in March, with core inflation—excluding food and energy—expected to rise more moderately.

Higher fuel costs have already pushed gasoline prices above $4 per gallon in the United States, reflecting the broader impact of rising crude oil prices.

The sharp increase in oil prices has become a key factor shaping investor expectations.

U.S. crude has climbed significantly this year, recently surpassing $100 per barrel for the first time since 2022 and briefly rising above $110.

Much of the focus remains on the Strait of Hormuz, a critical global oil transit route affected by ongoing tensions.

Analysts say that movements in oil prices are now influencing everything from inflation expectations to bond markets.

The S&P 500 posted a modest weekly gain, breaking a five-week losing streak. However, the index recently recorded its worst quarterly performance since 2022.

Markets have been weighed down by a combination of geopolitical risks, rising energy costs, and broader concerns about economic growth.

Investors will also begin to shift focus toward corporate earnings, with early reports from companies such as Delta Air Lines and Constellation Brands expected next week.

The broader earnings season, starting later in April, is projected to show solid profit growth, which could help support market sentiment if results meet expectations.

Rising inflation concerns have already led markets to scale back expectations for interest rate cuts this year.

Investors will also analyze minutes from the Federal Reserve’s latest meeting for clues about future monetary policy decisions.

With inflation data, oil prices, and corporate earnings all in play, markets are entering a pivotal period.

Analysts say the direction of stocks in the coming weeks will largely depend on whether inflation pressures ease—or intensify—as the economic impact of the ongoing conflict becomes clearer.

News.Az 

By Aysel Mammadzada