The truce already looks shaky, with Israel still striking Lebanon, while Iran warned that there can be no real deal unless those attacks stop. Shipping through the Strait of Hormuz remains badly disrupted. Markets, to their credit or their delusion, chose yesterday to focus on the possibility of an off-ramp. And yet the market's relief does not mean the danger has passed. If shipping through Hormuz begins to normalize, risk assets may keep climbing even with sporadic violence in the background. If shipping stays constrained, or energy infrastructure suffers further damage, then yesterday's relief rally may age about as well as a supermarket avocado.

Oil prices fell hard yesterday on hopes that the worst had passed, then rebounded this morning as confidence in the cease-fire faded. Even with oil below $100 a barrel, the message is not reassuring. Gulf producers have already cut output, and damaged infrastructure cannot be fixed by positive thinking. The Energy Information Administration expects Middle East oil production to be down by 9.1 million barrels a day in April, after a 7.5 million-barrel decline in March.

Today's focus is also on macro data. This morning's numbers offered a useful snapshot of the pre-shock economy. Weekly jobless claims came in at 219,000 for the week ending April 4, above the 210,000 expected. Claims remain low by historical standards, but they are a touch softer than forecast, which suggests hiring demand is cooling at the margins. Then there is spending. U.S. personal spending rose 0.5% in February from the prior month, just below the 0.6% economists expected. Americans are still spending, but hey are just not charging ahead with quite the same enthusiasm. 

Inflation, meanwhile, remains stubborn enough to keep the Federal Reserve uncomfortable. The core PCE price index, the Fed's preferred inflation gauge, rose 0.4% month over month in February, exactly as expected. On a year-over-year basis, core PCE rose 3.0%, also matching expectations. Inflation is no longer spiraling, but it is also not back to normal: it is sitting well above the Fed's 2% target and looking extremely comfortable there. Taken together, these figures describe an economy that is slowing a little, but not enough to give the Fed much room to relax. 

And that was before the latest oil story had time to show up in the data. That is why tomorrow's March CPI report matters even more than today's PCE release. February's inflation data are useful, but they are rearview-mirror useful. March CPI is expected to show the first meaningful pass-through from the jump in energy prices tied to the Iran conflict. Economists surveyed by The Wall Street Journal expect headline CPI to rise 3.3% year over year in March, up from 2.4% in February, while core inflation is expected at 2.7%, up from 2.5%.

So what should Americans watch in the coming week? First, whether this cease-fire becomes something sturdier than a headline. Talks are set to begin in Pakistan on Friday, with Vice President J. D. Vance leading the U.S. side. That is notable not only because the negotiations matter, but because Vance has been skeptical of this sort of military entanglement.

Second, watch oil and shipping, not just broad stock indexes. If Hormuz traffic improves, markets may decide the worst is behind us. If it does not, higher energy costs will keep feeding into inflation and complicating every conversation about rates, growth, and household budgets.

Third, watch the split between headline inflation and the rest of the economy. The United States is not in a classic overheating boom. It is in a more awkward place: growth that is decent but less energetic, inflation that is lower but not low, and a central bank that is stuck between wanting to support the economy and not wanting to look foolish six months later.

Today's economic highlights:

On today's agenda: consumer confidence in Japan; in Germany, monthly exports, trade balance, and industrial production; in the United States, weekly jobless claims, monthly PCE price index, monthly personal income, final quarterly GDP price index, monthly core PCE price index, yearly PCE price index, monthly personal spending, and final quarterly GDP growth rate. See the full calendar here.

  • Dollar index: 98.943
  • Gold: $4,744
  • Crude Oil (BRENT): $97.02 (WTI) $98.95
  • United States 10 years: 4.3%
  • BITCOIN: $71,301

In corporate news:

  • OpenAI plans to reserve part of its IPO shares for retail investors, while CFO Sarah Friar said public listing would allow the company to rely more on debt financing for its heavy compute needs.
  • FedEx reached a tentative deal with its pilots' union covering more than 5,000 pilots, including about a 40% wage increase in 2026 and annual 3% raises through 2030.
  • Chevron said it has fully restored domestic gas supply in Western Australia and lifted LNG production at Wheatstone to about 50% capacity as repairs continue after cyclone damage.
  • F-Secure signed an agreement with Verizon to become the technology provider for Verizon's Digital Secure Service.
  • General Motors is recalling 32,988 vehicles in the US because drivers may not be warned if a rear turn signal fails, increasing crash risk.
  • Goldman Sachs lowered its second-quarter 2026 oil price forecasts after the US-Iran two-week ceasefire, while keeping its later-quarter outlook broadly unchanged.
  • J Sainsbury's Nectar360 announced a new partnership with Uber and Uber Eats.
  • Ares Management appointed EG Morse as partner and head of Asia credit, while also naming Dinesh Goel and Gabriel Fong as co-heads of its Asia special situations strategy.
  • Meta is launching a new AI model, its first since its restructuring.
  • Walt Disney is planning to cut up to 1,000 jobs in the coming weeks, the WSJ has learned.
  • Delta Air Lines expects fuel costs to rise by more than $2 billion through to June due to the war in Iran.
  • ISS is advising Warner Bros shareholders to vote against golden parachutes at the special meeting.
  • AbbVie is taking legal action against a drug discount programme deemed ‘obsolete'.
  • Exxon Mobil expects its oil production to fall by around 6% in Q1.
  • Hungary is set to acquire HIMARS systems (Lockheed Martin) for $700 million.

Analyst Recommendations:

  • Alcoa: Morgan Stanley upgrades to overweight from equal weight and raises the target price from USD 64 to USD 80.
  • Alphabet Inc.: William O'Neil & Co Incorporated initiates coverage with a buy recommendation.
  • Caterpillar Inc.: William O'Neil & Co Incorporated initiates coverage with a buy recommendation.
  • Chord Energy Corporation: Gerdes Energy Research LLC upgrades to buy from neutral with a price target raised from USD 155 to USD 168.
  • Circle Internet Group, Inc.: Compass Point Research & Trading downgrades to sell from neutral and reduces the target price from USD 79 to USD 77.
  • Instacart (Maplebear): Raymond James upgrades to outperform from market perform with a target price of USD 50.
  • Lam Research Corporation: William O'Neil & Co Incorporated initiates coverage with a buy recommendation.
  • Marathon Petroleum Corporation: Zacks upgrades to outperform from neutral with a price target raised from USD 261 to USD 284.
  • Mccormick & Company, Incorporated: Zacks upgrades to neutral from underperform with a price target raised from USD 46 to USD 54.
  • The Hershey Company: Zacks downgrades to neutral from outperform and reduces the target price from USD 242 to USD 217.
  • Apa Corporation: Wells Fargo maintains its equalweight recommendation and raises the target price from USD 21 to USD 39.
  • Atlassian Corporation: Guggenheim maintains its buy recommendation and reduces the target price from USD 190 to USD 115.
  • Blackstone Inc.: Piper Sandler & Co maintains its neutral recommendation and reduces the target price from USD 158 to USD 122.
  • Donaldson Company, Inc.: Zacks maintains its neutral recommendation and reduces the target price from USD 116 to USD 91.
  • Galaxy Digital Inc.: Cantor Fitzgerald maintains its overweight recommendation and reduces the target price from USD 48 to USD 30.
  • Monday.com Ltd.: Guggenheim maintains its buy recommendation and reduces the target price from USD 180 to USD 130.
  • Stifel Financial Corp.: JP Morgan maintains its neutral recommendation and reduces the target price from USD 136 to USD 89.
  • Valero Energy Corporation: JP Morgan maintains its overweight recommendation and raises the target price from USD 217 to USD 285.