The Iran War Is Wall Street's Focus. Don't Forget About Inflation.

Markets are focused on geopolitical risk after President Trump’s 8 p.m. ET deadline for the Strait of Hormuz to reopen, a near-term driver of asset moves that sent stock futures higher while oil fell. Attention is shifting to inflation data: March CPI is due Friday and March PPI the following week. Wells Fargo analyst Ohsung Kwon warns that second-half 2026 inflation is the biggest risk for equities and that how the Fed reacts will determine whether stocks can withstand temporary energy-driven inflation — Kwon says equities could still perform well if the Fed tolerates around 3% inflation. In short, geopolitics is the immediate market catalyst, but incoming inflation prints and Fed policy response will be the key determinants of market direction.