March 2026’s CPI report revealed that energy costs surged last month, leading to a rise in inflation that wasn’t as steep as forecasted. The consumer price index increased seasonally adjusted 0.9% in March, putting the annual inflation rate at 3.3%. This was almost a full percentage point increase from February’s annual pace.

US Stock investors and economists say the March inflation reading only offers an early look at how the war in Iran is affecting U.S. consumer goods. US stocks opened Friday’s session mixed, with the tech-heavy Nasdaq rising as much as 0.5% and the blue-chip Dow falling about 0.4%. Meanwhile, after rising for seven straight days, on Friday the S&P 500 will look to clinch its first winning Friday since February 20.

However, despite the report not being as rough as projected, analysts still forecast a strenuous few months ahead due to the uncertain, ongoing war between the US and Iran. The global energy market has been impacted hard by the conflict, and that has leaked into the US stock market. “While I’m glad to see the effects to be less than expected in March, the effects in April are now more likely to be worse,” wrote Jamie Cox, managing partner at Harris Financial Group. “Since the Hormuz chokepoint was closed for an extended period, we should expect another one or two hot inflation prints,” Jeffrey Roach, chief economist for LPL Financial, also added. “The Fed clearly is on hold for the next several meetings.”

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Combined with likely additional pressure by the White House to cut interest rates, the battle against inflation is far from over. Furthermore, Consumer sentiment fell in April to the lowest level recorded in the 70-plus-year history of the University of Michigan’s survey, evidence of Americans’ concerns that the Iran war will hit the domestic economy. The survey’s preliminary April reading came in at 47.6, down from 53.3 in March. That was worse than analysts had expected. The previous low point, 50, was recorded in June 2022, when the U.S. was facing searing inflation.

Oil prices were roughly flat on Friday morning. Brent crude, the international benchmark, fell slightly under $96 per barrel after a brief jump on Thursday. Earlier in the week, prices were closer to $110 per barrel before news of the US-Iran cease-fire caused a pullback.