US Stock Market | Oil shock and war fears keep markets on edge ahead of key inflation data
Why it matters: The upcoming U.S. CPI data on April 10 will indicate if headline inflation rises sharply, impacting consumer spending and Fed policy.
- U.S. equities showed resilience, with the S&P 500 ending a five-week losing streak, but still logged its weakest quarterly performance since 2022.
- Oil prices surged past $110 per barrel, driven by supply concerns from disruptions in the Strait of Hormuz, directly impacting inflation expectations and bond markets.
- U.S. gasoline prices have climbed above $4 per gallon for the first time in over three years, per Reuters, showing the immediate consumer impact of rising energy costs.
- The U.S. consumer price index (CPI) data, due April 10, is expected to reveal how deeply the oil shock is feeding into broader price levels, with a Reuters poll suggesting a sharp rise in headline inflation.
- Markets have largely scaled back hopes of interest rate cuts this year, as persistent price pressures complicate the Federal Reserve’s path forward.
- S&P 500 companies are projected to deliver double-digit earnings expansion for the first quarter, according to Reuters, offering a key pillar of support for equity markets amid macroeconomic risks.
U.S. equities are teetering on the edge, with the S&P 500 snapping a five-week losing streak but facing significant headwinds from surging oil prices, which climbed past $110 per barrel, and escalating geopolitical tensions. All eyes are on the upcoming CPI data on April 10, as markets brace for potential inflation spikes and a recalibration of interest rate cut expectations, despite anticipated double-digit corporate earnings growth for Q1.
