Outlook for this week: Trump's "final ultimatum" triggers rise in oil prices, Delta Air Lines, Inc. (DAL.US) financial report with dense US inflation data coming.

President Donald Trump of the United States issued another "ultimatum" over the weekend, implying that the conflict with Iran will sharply escalate, causing the price of crude oil to continue rising. This has heightened the risk of an energy shock, which has already put pressure on the global economic outlook. This week, market focus will be on US consumer spending and inflation indicators, with companies like Delta Air Lines, Inc. set to release their financial reports. The escalation of tensions in the Middle East has caused market fluctuations, with oil prices soaring and gold and silver prices falling. At Monday's opening, Brent crude oil rose nearly 2%, surpassing $110 per barrel, with a cumulative increase of over 80% since the beginning of the year. Gold fell by 1% to around $4602 per troy ounce. The Bloomberg Dollar Spot Index edged up by 0.03%. Last week, despite the tumultuous trading triggered by the escalating Iran conflict following President Trump's national address last Wednesday evening, two of the three major US stock indexes recorded weekly gains by Thursday's close. The S&P 500 index closed marginally in positive territory on Thursday, recording a weekly gain of 1.6%; the Dow Jones Industrial Average fell slightly by 0.1% on Thursday, but still posted a 1.2% weekly gain. The two indexes have fallen by 3.8% and 3.2% respectively since the beginning of the year, with narrower declines compared to before. The tech-heavy Nasdaq Composite Index closed up by 0.2%, with a weekly gain of 2.2%. Key Economic Calendar Events In terms of economic data this week, US consumer spending and inflation indicators will be the market focus. The Personal Consumption Expenditures (PCE) price index for February and the Consumer Price Index (CPI) for March will be released on Thursday and Friday respectively. Investors will also look for market sentiment signals in the preliminary data on April consumer confidence, current conditions, and expectations from the University of Michigan on Friday. On the macroeconomic front, central banks in India, New Zealand, and South Korea will announce interest rate decisions this week. Market expectations are for all three central banks to keep rates unchanged. On the corporate earnings front, Delta Air Lines, Inc. (DAL.US) will report on Wednesday, providing a key indicator of how the conflict with Iran and subsequent surge in aviation fuel prices may impact the aviation industry, which is highly sensitive to oil price fluctuations. Levi Strauss (LEVI.US) and Constellation Brands (STZ.US) will also release earnings reports, providing two sets of observation data on changes in consumer spending in the backdrop of the war. Stronger-than-expected Non-Farm Payrolls Signal "Balance" The job report for March released last Friday showed a surprising turnaround, with the US economy adding 178,000 non-farm jobs in the month, a significant increase compared to the previous month's loss of 92,000 jobs, and well exceeding economists' expectations of 65,000 job gains. This reflects another fluctuation between positive and negative employment data in the past 10 months. By averaging the job gains of 160,000 in January, job losses of 133,000 in February, and job gains of 178,000 in March, the US currently adds an average of 68,000 jobs per month, roughly in line with economists' predictions. Gina Bolvin, President of Bolvin Wealth Management Group, commented in an email, "The conclusion is balance. Stronger hiring reduces the urgency of rate cuts, but doesn't change the overall cooling trend." Nevertheless, the market is likely to interpret this data as a signal of moving in the right direction. Michael Feroli, Chief US Economist at JPMorgan, wrote in a report to clients last Friday, "While employment data always have some caveats, this report does not contain any obvious flaws sufficient to negate the generally positive information. This gives us more confidence that economic growth can withstand the current energy price shock without suffering significant and lasting damage." Rising Oil Prices Expected to Reflect in March Inflation Data As investors try to assess the impact of the Middle East conflict on the economy, the PCE report on Thursday and the CPI data for March on Friday will serve as the first authentic readings to measure the pass-through effects of rising commodity prices on US inflation. Andy Schneider, Senior US Economist at BNP Paribas, stated in a recent client report, "The disruption in the Strait of Hormuz is coinciding with the ongoing tariff pass-through, putting inflation in the sixth year above target levels. We believe the first stage of oil price pass-through will show in March." Data from AAA shows that last week, the national average gasoline retail price in the US exceeded $4 per gallon. Analyst Ben Schumway of Goldman Sachs Group, Inc. pointed out that overall inflation is steadily rising, "further dragging down consumer confidence from already low levels." However, Manuel Abascal, US economist at Goldman Sachs Group, Inc., believes that given the current state of the US economy, the price increases caused by the war have limited risk of significantly impacting the key CPI and core PCE indicators. Abascal stated, "The scale and breadth of the current supply shock do not cause as much concern as previous events that triggered inflation issues." As mentioned earlier, Delta Air Lines, Inc.'s quarterly report on Wednesday will likely provide another key reading on the price increases facing consumers - becoming the third "unofficial" barometer of inflation this week. Little Hope for Easing in Oil Market At the core of all this is the fact that both international and US benchmark crude oil futures prices have risen by over 50% since the start of the war five weeks ago. Despite a temporary drop in oil prices before President Trump's speech last Wednesday evening, with prices briefly falling below the key $100 per barrel mark, comments threatening to "bomb Iran back to the Stone Age" once again pushed oil prices sharply higher, firmly above $100. Over the weekend, Trump issued another "ultimatum," igniting a surge in oil prices and pushing Brent crude oil to over $111 on Monday. Daniela Hasson, analyst at Capital.com, wrote in an email, "The market is no longer trading with expectations of easing, but is trading on the likelihood of escalation. Trump's speech may be aimed at appeasing the domestic audience, but for investors, this raises the stakes." Signs of both sides seeking an exit route had appeared earlier in the week. Trump expressed his desire for the US to end involvement within two to three weeks; Iranian President Hassan Rouhani stated that Iran "has the necessary will to end this war." However, with the situation continuing to be in turmoil, the market is still pricing in the possibility of further escalation. Passage through the critical energy shipping chokepoint - the Strait of Hormuz - remains near zero, with alternative supply routes only able to fill a small part of the 15 million barrels per day supply gap. Paula Rodriguez-Masi, Chief Oil Analyst at Rystad Energy, stated in a recent client report, "Over the past four weeks, the market has shown significant resilience in the face of supply disruptions, as pre-war surpluses, in-transit crude, and policy reserves have provided temporary buffers and suppressed prices. This phase is now ending."