June S&P 500 E-Mini futures (ESM26) are trending down -0.02% this morning, swinging between gains and losses as investors cautiously await key U.S. inflation data to gauge the impact of higher oil prices stemming from the Middle East conflict.

Investors also await talks between the U.S. and Iran for indications that the fragile truce can hold. The U.S. and Iran are scheduled to begin talks in Pakistan this weekend, with Vice President JD Vance heading the U.S. delegation. President Trump said he was “optimistic” about reaching a deal with Iran, even as he threatened Tehran over imposing fees in the Strait of Hormuz, where there has been little indication of a significant increase in traffic since the truce began. The price of WTI crude rose on Friday but stayed below $100 a barrel.

In yesterday’s trading session, Wall Street’s major indices closed higher. Brown-Forman (BF.B) surged over +12% and was the top percentage gainer on the S&P 500 after the Wall Street Journal reported that Sazerac recently approached the company about a potential deal. Also, Amazon.com (AMZN) climbed more than +5% and was the top percentage gainer on the Dow and Nasdaq 100 on news that the Justice Department has launched an investigation into whether the National Football League engaged in anticompetitive practices that harmed consumers. In addition, Marvell Technology (MRVL) rose over +4% after Barclays upgraded the stock to Overweight from Equal Weight with a price target of $150. On the bearish side, Zscaler (ZS) cratered more than -11% and was the top percentage loser on the Nasdaq 100 after BTIG downgraded the stock to Neutral from Buy and removed it from its first-half Top Picks list.

“Not much matters for the market other than the durability of the [U.S.-Iran] ceasefire, shipping volume through the Strait of Hormuz, and ultimately, whether a bona fide permanent deal is struck,” said Bradford Smith at Janus Henderson Investors.

Data from the U.S. Department of Commerce released on Thursday showed that the core PCE price index, a key inflation gauge monitored by the Fed, rose +0.4% m/m and +3.0% y/y in February, in line with expectations. At the same time, U.S. Q4 GDP growth was revised downward to +0.5% (q/q annualized) from the second estimate of +0.7%. Also, U.S. February personal spending rose +0.5% m/m, weaker than expectations of +0.6% m/m, while personal income unexpectedly fell -0.1% m/m, weaker than expectations of +0.3% m/m. In addition, the number of Americans filing for initial jobless claims in the past week rose by +16K to an 8-week high of 219K, compared with the 210K expected.

Meanwhile, International Monetary Fund Managing Director Kristalina Georgieva said on Thursday that the global economy is poised to expand more slowly than previously forecast, even if the truce in the Middle East proves lasting.

U.S. rate futures have priced in a 98.4% probability of no rate change and a 1.6% chance of a 25 basis point rate hike at the April FOMC meeting.

Today, all eyes are focused on the U.S. consumer inflation report for March, which is set to be released in a couple of hours. The report will provide the first comprehensive insight into the extent and pace at which the Middle East conflict has impacted U.S. price levels. Economists, on average, forecast that the U.S. March CPI will come in at +1.0% m/m and +3.4% y/y, compared to the previous numbers of +0.3% m/m and +2.4% y/y. The core CPI, which strips out the more volatile food and energy prices, is expected to be more subdued in March, though still showing some upward momentum. Economists anticipate the core CPI to increase by 0.3% on the month, equating to a 2.7% annual gain. That is up from February’s numbers of +0.2% m/m and +2.5% y/y.

The University of Michigan’s U.S. Consumer Sentiment Index will also be closely watched today. Economists estimate the preliminary April figure will stand at 51.6, compared to 53.3 in March.

U.S. Factory Orders data will be released today as well. Economists project this figure to drop -0.3% m/m in February, following a +0.1% m/m gain a month earlier.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.30%, up +0.37%.

The Euro Stoxx 50 Index is up +0.60% this morning amid optimism ahead of U.S.-Iran talks scheduled for this weekend. U.S. and Iranian delegations are scheduled to meet in Pakistan on Saturday, with President Trump saying he was “optimistic” about reaching a deal with Iran. Also boosting sentiment in the region, Ukraine’s top negotiator with Russia said he sees progress toward a potential peace deal with the Kremlin. Healthcare and technology stocks outperformed on Friday. Luxury stocks also advanced, led by a more than +5% gain in Brunello Cucinelli (BC.M.DX) after it posted better-than-expected Q1 revenue. At the same time, energy stocks slid. The benchmark index is on track to notch its third consecutive weekly gain. Final data from the federal statistics office confirmed on Friday that the German annual inflation rate rose to 2.7% in March. Separately, data showed that Italy’s monthly industrial production edged higher in February, falling short of expectations for a stronger rebound after two consecutive months of declines. Meanwhile, Bloomberg News reported on Friday that the European Union and Washington are nearing an agreement to coordinate on the production and security of critical minerals. Investors are now turning their attention to key U.S. inflation data due later in the day. In other corporate news, Sodexo (SW.FP) plunged over -11% after the French group posted weaker-than-expected first-half earnings and cut its full-year organic revenue growth guidance.

Germany’s CPI and Italy’s Industrial Production data were released today.

The German March CPI rose +1.1% m/m and +2.7% y/y, in line with expectations.

The Italian February Industrial Production rose +0.1% m/m and +0.5% y/y, compared to expectations of +0.5% m/m and +0.5% y/y.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.51%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.84%.

China’s Shanghai Composite Index closed higher today as a pick-up in domestic inflation boosted sentiment. Brokerage stocks led the gains on Friday. Also, shares of battery makers jumped after Beijing once again summoned manufacturers to emphasize the need to curb irrational competition and avoid destructive price wars. The benchmark index recorded its first weekly gain in six weeks. Data from the National Bureau of Statistics released on Friday showed that China’s factory-gate prices returned to positive territory in March, ending a 41-month run of deflation as energy costs jumped amid the Middle East conflict, which disrupted large portions of global oil supply. Still, many economists said the energy-driven return to inflation is unlikely to deliver broader gains for China’s economy if domestic demand remains weak. Meanwhile, China’s consumer price inflation cooled slightly in March as the seasonal boost from holiday spending faded, though this may prove temporary as the Middle East conflict pushes costs higher. In other news, China’s state planning agency said on Friday that it had issued a second batch of ultra-long-term special treasury bonds worth 62.5 billion yuan ($9.2 billion) to support local governments’ efforts to implement a trade-in program for consumer goods. Investor focus now shifts to China’s first-quarter gross domestic product data and a series of activity indicators for March due next week for further insight into the health of the economy.

The Chinese March CPI fell -0.7% m/m and rose +1.0% y/y, weaker than expectations of -0.2% m/m and +1.2% y/y.

The Chinese March PPI rose +0.5% y/y, stronger than expectations of +0.4% y/y.

Japan’s Nikkei 225 Stock Index closed higher today as investors were cautiously optimistic ahead of U.S.-Iran talks this weekend. Chip stocks were among the biggest gainers on Friday, tracking overnight advances in their U.S. counterparts. The Nikkei was also boosted by an about +12% jump in Fast Retailing after the Uniqlo owner raised its full-year operating profit guidance, thanks to solid margins and gains fueled by strong Uniqlo demand in the U.S. and Europe. The benchmark index notched its strongest weekly gain in more than a year. Japan’s five-year government bond yields hit a record high on Friday as investors assessed government and central bank responses to economic pressures stemming from the Middle East conflict. Data released on Friday showed that Japan’s annual wholesale inflation jumped in March, underscoring mounting price pressures that could prompt the Bank of Japan to raise interest rates as early as this month. BOJ Deputy Governor Ryozo Himino said on Friday that the central bank will guide monetary policy while keeping a close watch on the magnitude and duration of the economic shock caused by the Middle East conflict. “We will take the most appropriate monetary policy decision from the standpoint of stably achieving our 2% inflation target with an eye on the scale and length of shock, as well as the economic environment at the time,” Himino said. Elsewhere, Japanese Finance Minister Satsuki Katayama said on Friday that the country is prepared to take decisive action on “all fronts” against speculative moves in the oil and foreign exchange markets. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -3.66% to 32.61.

The Japanese March PPI rose +0.8% m/m and +2.6% y/y, compared to expectations of +0.9% m/m and +2.4% y/y.

Pre-Market U.S. Stock Movers

Organon (OGN) climbed about +10% in pre-market trading after The Economic Times reported that Sun Pharmaceutical submitted a $12-billion binding offer for the company.

Lumentum Holdings (LITE) rose over +4% in pre-market trading after CEO Michael Hurlston said in an interview that demand from the largest U.S. tech companies for its optical components is picking up.

ServiceNow (NOW) fell over -2% in pre-market trading after UBS downgraded the stock to Neutral from Buy.

Autodesk (ADSK) dropped more than -1% in pre-market trading after Citi downgraded the stock to Neutral from Buy.

Nike (NKE) slipped about -0.6% in pre-market trading after Piper Sandler downgraded the stock to Neutral from Overweight.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - April 10th

Lotus Technology (LOT), The Children’s Place (PLCE).