The war in Iran is likely to be back at the forefront of investor concerns as a new trading week begins, with investors scrutinizing both the ongoing airstrikes and hopes for a possible ceasefire. Oil prices remain well above pre-war levels, underscoring concerns about an energy shock that could become more apparent in upcoming US inflation data. Results from carrier Delta Air Lines and beverage group Constellation Brands will also be closely watched, as the quarterly earnings season is set to intensify later this month.
1. The war in Iran
Traders will return to their offices after a shortened holiday week to face conflicting signals from the raging conflict in the Middle East.
On one hand, Iran and the United States have received a framework for ending hostilities and reopening the Strait of Hormuz, according to several media outlets citing sources familiar with the proposals. The plan could go into effect as early as Monday.
According to the Associated Press, the plan was drafted by Pakistan, Egypt, and Turkey and shared with both sides overnight. It reportedly follows a two-stage approach: an immediate ceasefire followed by a broader, more comprehensive agreement.
Meanwhile, Axios first reported on Sunday that the United States, Iran and regional mediators were discussing a possible 45-day ceasefire as part of a two-phase deal that could lead to a permanent end to the war, citing US, Israeli and regional sources.
However, despite hopes for an imminent end to the fighting, the conflict continued to escalate, with Iran and Israel launching new attacks on each other. Over the weekend, in a social media post and media interviews, US President Donald Trump issued a fresh warning that the United States would strike Iranian energy facilities if the Strait of Hormuz, a vital waterway through which about a fifth of the world's oil flows, was not reopened by Tuesday evening. Iran rejected the ultimatum.
2. Oil prices remain high
Oil prices fell slightly on Monday, giving back some recent gains, due to hopes for an imminent end to the war in Iran.
However, Brent crude futures, the global benchmark, remain close to $110.00 a barrel, well above levels seen before the conflict began in late February. Before the war, Brent was trading at around $70.00 a barrel.
The surge has raised concerns about rising inflation, which could impact growth prospects for countries worldwide and affect a wide range of industries. Some analysts have suggested that only the reopening of the Strait of Hormuz could alleviate these mounting pressures.
On Sunday, OPEC+ said it had agreed to raise oil production quotas by 206,000 barrels per day for May, although the increase is likely to be only on paper because key members of the producer group are largely unable to expand production due to the war in Iran.
3. Upcoming inflation data and the Federal Reserve releases its minutes
The highlight of the economic calendar will be the release of the US Consumer Price Index for March, which observers will be looking for any indication of the inflationary effects of the conflict in Iran.
Given the surge in crude oil prices, analysts have suggested that a key focus of the April 10 Consumer Price Index reading will be the potential rise in gasoline costs. Average U.S. gasoline prices climbed above $4.00 a gallon for the first time in more than three years last week.
Meanwhile, the Personal Consumption Expenditures Price Index, a measure of inflation closely watched by the Federal Reserve.
However, the personal consumption expenditures index will cover February, a period that largely did not include the war in Iran, meaning it is unlikely to reflect any significant impact from the fighting. Nevertheless, the figure may offer a glimpse into the state of inflation in the United States before the war took hold.
The minutes from the Federal Reserve's March meeting are also due to be released this week and could provide further clues about the central bank's monetary policy path. The Fed kept interest rates unchanged last month.
4. Delta Airlines will announce the results.
War-induced inflation may also affect how Wall Street views the quarterly earnings season, as investors hope that strong earnings will help mitigate some of the effects of the conflict.
According to LSEG data cited by Reuters, S&P 500 companies are expected to post a 14.4% year-over-year increase in first-quarter earnings – a possible sign that underlying corporate activity is healthy despite the strain from the energy shock.
An initial batch of results is scheduled to be released in the coming days, before the full first-quarter results announcement period begins next week.
Among the notable names in the schedule is Delta Air Lines, which is scheduled to announce results before the opening bell on Wednesday.
Before the fighting began in the Middle East, the aviation industry was projecting record profits of $41 billion in 2026, according to Reuters. Airlines' ability to remain profitable may ultimately depend on the duration of high oil prices, which have forced airlines worldwide to raise fares and reduce capacity.
5. Constellation Brands earnings
Elsewhere, Constellation Brands, the group behind beer names such as Modelo Special and Corona, is scheduled to announce results after trading closes on Wednesday.
The company's shares fell by more than 16% over the past year, but have risen by more than 9% so far this year.
In January, Constellation Brands said it was supported by demand for drinks such as Pacifico, Victoria and Corona Familiar despite a tough market for alcohol sales in the United States.
However, executives at the time indicated that beer sales could remain volatile due to economic uncertainty and high unemployment among Hispanic customers, one of its largest customer bases.
