The announcement of a two-week ceasefire earlier this week between the US and Iran buoyed Wall Street, setting the S&P 500 on track for its largest weekly jump since November.
Meanwhile, the Dow is set to post its strongest gains since June.
The March reading of the consumer price index is scheduled for release at 8.30am and is expected to show how elevated energy prices from the Iran conflict impacted the world’s largest economy.
Consumer prices likely recorded their biggest increase in nearly four years in March, with economists polled by Reuters expecting the CPI to come in at 3.3% annually, which could further dim hopes of monetary easing from the US Federal Reserve (Fed) this year.
Money market participants are not pricing in any easing in 2026. They had expected two interest-rate reductions before the war broke out, according to the CME Group’s FedWatch.
At a particular point during the Iran conflict, they had raised bets on a rate hike in December.
“While Fed officials expected higher oil prices to delay the anticipated decline in US inflation toward their 2% target, we continue to believe that the central bank remains on track to cut rates later this year,” said analysts at UBS Global Wealth Management.
They expect “sequential core inflation to cool” in the coming months as tariff effects fade and falling labor demand potentially leads to an uptick in the unemployment rate, which could strengthen the case for rate cuts.
At 06:53am, Dow E-minis were down 19 points, or 0.04%, S&P 500 E-minis were up 3.25 points, or 0.05%, and Nasdaq 100 E-minis were up 26.5 points, or 0.1%.
Investors also watched the developments in the Middle East conflict as the two-week ceasefire between the US and Iran showed signs of strain ahead of the first round of talks, scheduled for Saturday.
However, markets drew comfort from Israeli prime minister Benjamin Netanyahu’s comments that he was seeking direct talks with Beirut, leading Wall Street’s main indexes to close higher on Thursday.
“Investors could be in for a fretful weekend as they wait for indications of whether a path to lasting peace is possible. Ahead of this, they may be tempted to hedge their bets”, said Dan Coatsworth, head of markets at AJ Bell.
Iran and the US have accused each other of violating ceasefire promises, making it a shaky truce, while the Strait of Hormuz remains largely shut, making markets highly sensitive to headline developments.
A preliminary reading of the University of Michigan’s consumer sentiment survey for April is due after markets open on Friday.
In premarket movers, US-listed shares of Taiwan Semiconductor Manufacturing rose 2.1% after the world’s largest contract chipmaker beat market forecasts for first-quarter revenue.