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April 10, 2026 – 15:54

(Bloomberg) — The first inflation snapshot of the war-fueled spike in energy costs matched expectations, driving stocks higher ahead of this weekend’s planned peace talks between the US and Iran.

While consumer prices jumped the most in nearly four years, core inflation — which is what the Federal Reserve closely watches — came relatively tame. That was enough to the put the S&P 500 on pace for its best week since May. Bond yields edged higher, with traders continuing to price in a one-in-three chance of a rate cut in 2026. Oil hovered near $98.

“There are no signs, yet, that high energy prices are seeping into core inflation,” said Brian Jacobsen at Annex Wealth Management. “That could be a process that plays out over time as companies absorb the brunt of the blow, at least initially.”

A record increase in gas prices was responsible for nearly three-quarters of the monthly advance. Americans are already experiencing higher prices at the pump, with some companies warning of price hikes ahead.

“The message is clear: inflation remains sticky,” said Bret Kenwell at eToro. “While this may not justify higher interest rates from the Fed, it should keep policymakers on pause unless we see a more notable deterioration in the labor market or the broader economy.”

Investors also kept a close eye on the latest geopolitical developments, looking for signs that a ceasefire deal between the US and Iran will hold. Delegations for both countries are set to meet in Pakistan on Saturday, with shipping through the Strait of Hormuz remaining the focus.

Since the Hormuz chokepoint was closed for an extended period, we should expect another one or two hot inflation prints, driven by transportation services and some durable goods categories, according to Jeff Roach at LPL Financial.

“The Fed clearly is on hold for the next several meetings,” he added.

The duration of the war matters as does the extremely important Strait of Hormuz, because if the supply shock is temporary then the economy can weather this storm and the Fed will have an opportunity to lower interest rates by the end of the year, noted Chris Zaccarelli at Northlight Asset Management.

“But if the inflation shock is more long-lasting they will have no choice but to sit on their hands for the entire year,” he said.

Markets may continue to wrestle with concerns that sticky inflation could become a quagmire as long as oil remains elevated, according to Ellen Zentner at Morgan Stanley Wealth Management.

“But the Fed will likely continue to run its ‘cautious’ playbook —not pivot to rate hikes,” she added.

Corporate Highlights:

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Stocks

The S&P 500 was little changed as of 9:53 a.m. New York time The Nasdaq 100 rose 0.4% The Dow Jones Industrial Average fell 0.5% The Stoxx Europe 600 rose 0.6% The MSCI World Index rose 0.2% Currencies

The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.2% to $1.1726 The British pound rose 0.2% to $1.3459 The Japanese yen fell 0.1% to 159.18 per dollar Cryptocurrencies

Bitcoin fell 0.3% to $72,226.7 Ether rose 0.3% to $2,220.12 Bonds

The yield on 10-year Treasuries advanced three basis points to 4.31% Germany’s 10-year yield advanced six basis points to 3.05% Britain’s 10-year yield advanced eight basis points to 4.83% Commodities

West Texas Intermediate crude rose 0.4% to $98.24 a barrel Spot gold rose 0.2% to $4,774.60 an ounce ©2026 Bloomberg L.P.