The last minutes before 8: 30 a. m. ET can feel like a held breath on Wall Street, and Friday was no different: pce sat at the center of traders’ screens as U. S. stock futures rose modestly and oil prices retreated after days of turmoil tied to the still-hot Iran conflict.
What is driving markets ahead of Pce?
Stocks steadied Friday after a headlong sell-off, with investors weighing two forces at once: the evolving Middle East conflict and the inflation reading that matters most to Federal Reserve policy thinking. In bumpy premarket action, contracts on the Dow Jones Industrial Average and the S& P 500 both gained 0. 4%, while Nasdaq 100 futures were also up 0. 4%.
The respite arrived after markets were destabilized by a sharp rise in oil prices. That surge helped push the three major U. S. stock benchmarks to their lowest closing levels of 2026—and their lowest points since November—on Thursday. The conflict marked its second week as Israel launched fresh attacks on Tehran on Friday, while Tehran was seen as behind missile strikes on Dubai and Turkey. The U. S. also said four crew were killed when a military refueling plane crashed.
As traders watched the geopolitical headlines scroll, they also watched crude. West Texas Intermediate futures were down 2% to below $94 a barrel, while Brent crude futures retreated under $100 after settling above that level for the first time since August 2022. The pullback offered some near-term relief, but it did not erase the underlying anxiety around supply and inflation.
How did the Iran conflict and oil prices shape expectations for the Federal Reserve?
The escalating conflict has been a central driver of the market’s unease because it fueled higher oil prices, and higher oil prices have raised inflation worries. Those worries, in turn, have shifted expectations around Federal Reserve policy. Traders scaled back bets that the central bank will cut interest rates this year.
Against that backdrop, the spotlight fell on the Personal Consumption Expenditures price index, the Fed’s preferred inflation measure. The January update was scheduled for release at 8: 30 a. m. ET. Alongside inflation, investors also had a second macro calendar in view: the first revision of fourth quarter GDP growth, after the measure came in sharply under expectations in an initial reading.
In the oil market, policy steps intersected with the conflict’s risks. In the latest effort to cool the rally, the U. S. gave a second waiver for purchases of sanctioned Russian crude. At the same time, Iran’s new leader vowed to keep the key Strait of Hormuz waterway closed. Analysts said the waiver could ease but not fix what was seen as the largest oil supply disruption in history.
What did the Pce inflation data show at 8: 30 a. m. ET?
When the data arrived, it put numbers to the tension traders had been trying to price in. Prices rose 0. 3% in January over the previous month, based on Personal Consumption Expenditures index data released Friday by the Bureau of Economic Analysis. The gain matched economists’ expectations of 0. 3% and came in below December’s 0. 4% month-on-month increase.
Core PCE, which excludes the more volatile food and energy categories, rose 0. 4% on the month, matching the previous month’s 0. 4% growth. Economists had also predicted a 0. 4% rise.
On an annual basis, the headline and core PCE price indexes rose 2. 8% and 3. 1%, respectively, in December from the previous year. Economists had expected annual growth of 2. 9% and 3. 1% for the two measures.
The release also included updates on households’ financial footing. Personal income rose 0. 4% in December on a monthly basis—above the previous month’s 0. 3% and below economists’ expectations of 0. 5%. Personal spending increased 0. 4% from the prior month, above expectations of 0. 3% and in line with the previous month’s 0. 4% growth.
For investors, the inflation and spending figures landed amid a week where the energy shock and renewed inflation concerns altered the mood. Gold headed for its second weekly decline as crude oil traded near $100 per barrel amid the war in the Middle East.
What else are investors watching after pce?
Even with the inflation reading in hand, traders’ day did not end at 8: 30 a. m. ET. After a dismal February jobs report, investors planned to pay close attention to Friday’s Job Openings and Labor Turnover survey (JOLTs). A first look at consumer confidence in March from the University of Michigan was also set to offer a broad read on consumer sentiment.
Those reports matter because markets are trying to understand whether the economy is cooling in a way that could reshape the policy outlook—an outlook already jolted by war-driven oil moves and by investors’ reduced expectations for rate cuts this year.
As trading moved forward, the morning’s story remained the same one that had been building for days: a conflict that can change the price of energy overnight, and an inflation gauge that can change the shape of rate expectations just as quickly. In that narrow window before the bell, pce was less a statistic than a checkpoint—one that traders crossed while still listening for the next headline.
