MARKET SNAPSHOT

U.S. stocks finished mixed, Treasury yields edged higher and oil prices settled lower after U.S. inflation data came in hot, as expected, and investors awaited the outcome of weekend peace talks between the U.S. and Iran. Gold fell and the dollar weakened slightly. Monday will bring the start of the first-quarter earnings season and investors will be parsing the results of major U.S. companies for any signs that Iran war has started to leave a mark on the global economy.

MARKET WRAPS

EQUITIES

U.S. stocks notched their best weekly gains of the year, with investors pinning hopes on a diplomatic end to the Iran conflict and looking past a war-fueled surge in consumer prices.

The major indexes rallied in the two days following President Trump's announcement that the U.S. had reached a cease-fire with Iran, only to limp into the weekend after a government report showing inflation had ticked higher largely owing to the continuing conflict.

Investors were cautiously optimistic as Iran and the U.S. prepared for high-level talks in the Pakistani capital, Islamabad, on Saturday. And hopes for a permanent solution to the nearly six-week-old war propelled all three major U.S. indexes to their best weekly performance of the year, with each logging a gain of more than 3%.

Still, uncertainty over this weekend's high-stakes negotiations persisted. On Friday, the S&P 500 fell 0.1%. The Dow Jones Industrial Average shed 0.6%. The tech-heavy Nasdaq gained 0.4%, exiting a 10-day correction, or a 10% drop from its recent peak.

"We've definitely seen some risk get put back on, but it does feel like people are still shying away from those risk assets in the meantime, particularly heading into the weekend with more talks coming," said Justin Wiggs, managing director of equity trading at Stifel Financial.

Asian equities rose broadly on Friday, as the fragile cease-fire brought relief to investors. Tech shares rose across Asia as risk-on sentiment resumed, led by chip stocks.

China's Shanghai Composite Index advanced 0.5% while the Shenzhen Composite Index gained 1.5%. The tech-focused ChiNext Price Index jumped 3.8% and Hong Kong's Hang Seng Index was 0.5% higher.

Japan's Nikkei Stock Average gained 1.8%, as electronics stocks led gains.

South Korea's Kospi climbed 1.4%. South Korea's central bank kept its base rate unchanged for a seventh straight meeting ahead of a leadership change.

Taiwan's TAIEX added 1.6% after the country's exports surged 61.8% in March, supported by sustained demand for artificial-intelligence applications.

Stocks in Australia slipped, as the S&P/ASX 200 Benchmark Index gave back 0.1%.

New Zealand's S&P/NZX 50 Index fell 0.7%.

COMMODITIES

Crude futures settled lower in cautious trading as the U.S. and Iran planned weekend talks that were seen as crucial to the success of the cease-fire and reopening of the Strait of Hormuz.

"There's a lot of caution in the market because there's so much uncertainty," said Andrejka Bernatova, CEO of energy-focused special purpose acquisition company Dynamix Corporation III.

"Investors are on the sidelines, one because there's volatility, changes on a daily basis. It's really hard to react to what's going to happen."

The big question for the market is whether the Strait of Hormuz is reopened, she added. "It's not an issue just of pricing, but the supply of oil all around the world."

WTI settled down 1.3% at $96.57 a barrel, down 13% on the week thanks to Wednesday's 16% drop on news of the truce. Brent fell 0.8% to $95.20 for a 13% weekly decline.

Precious metal futures gained ground for the week. Front-month gold settled down 0.6% to $4,761.90 a troy ounce-but was up 2.4% for the week.

Silver added 0.1% to $76.324/oz-and has a 4.9% rise for the week.

Gold and silver slowly returned to being a market hedge during the Iran war.

"We believe the bull market will return, but first and foremost a cessation of hostilities with Iran and the formal reopening of the Strait of Hormuz, and persistently lower oil prices, would need to occur, " said James Steel of HSBC.

TODAY'S TOP HEADLINES

Iran's Nuclear Program Has Survived, Posing Problem for U.S. Negotiators

Iran survived five weeks of punishing U.S. and Israeli bombing with most of the tools it needs to make a nuclear bomb intact, officials and experts say, posing a challenge for U.S. negotiators as the issue once again bedevils talks with Tehran.

Vice President JD Vance pointed to Iran's nuclear ambitions on Sunday as the core dispute after the two sides were unable to reach an agreement during 21 hours of talks in Islamabad, Pakistan.

"The simple fact is that we need to see an affirmative commitment that they will not seek a nuclear weapon and that they will not seek the tools that would enable them to quickly achieve a nuclear weapon," he said.

Inflation Soared to 3.3% in March, Driven by Higher Gasoline Costs

Consumer prices soared in March, pushed higher by skyrocketing gasoline prices.

Consumer prices were up 3.3% in March from a year earlier, the Labor Department said Friday, much hotter than February's gain of 2.4%.

Consumer Sentiment Hits Record Low, Michigan Survey Shows

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 initial April reading came in at 47.6, versus 53.3 in March. Analysts polled by The Wall Street Journal were expecting a drop to 52. The April reading is below the previous low point of 50 recorded in June 2022, when the economy was facing searing inflation.

The initial April results are based almost entirely on interviews that took place between March 24 and April 6, before a tentative cease-fire took hold. The survey will be updated with a final April reading later this month, based on more recent responses.

White House Fields Warnings About Iran War's Economic Hit

One big nonmilitary question has loomed over President Trump's attacks and now cease-fire in Iran: Would the U.S. economy take a hit from a prolonged war?

Since earlier this year, the president and advisers have been privately hearing from cabinet officials, political allies and corporate leaders about what the war could do to Wall Street and Main Street if it didn't conclude within a tight time frame. Many cautioned against-or drew up scenarios for-a more-extended fight.

Treasury Secretary Scott Bessent spoke with Trump about the market reaction and the U.S. economic trajectory as it related to the length of the war, according to people familiar with the matter. Bessent and the president discussed various measures the Treasury could take if the war went on for eight to 12 weeks and how the U.S. could be vulnerable to a potential rise in gasoline prices, these people said. Bessent told the president that he believed Asia and Europe would be the areas most vulnerable to rising energy prices from the war.

Russia Blasts Through Ukraine Cease-Fire, as Trump-Backed Talks Drift

KYIV, Ukraine-Russian President Vladimir Putin promised a cease-fire for Orthodox Easter.

As of Sunday morning, his army had carried out 28 infantry assaults, 479 artillery bombardments and 1,792 explosive-drone strikes while refraining from long-range strikes, according to Ukraine's military. Russia said it had observed the cease-fire and blamed Ukraine, which had said it would match Russian actions, for breaking it.

The gap between public proclamations and the reality of continued attacks even during a 32-hour cease-fire reflects the efforts by both sides to position themselves as the peacemakers while not losing impetus on the battlefield.

Big Pharma Is Turning to China for the Newest Drug Ideas

Finding innovative ways to treat cancer is Pfizer's biggest priority so to boost cutting-edge technologies, Pfizer executives went to Shenyang, China. There, last summer, Pfizer paid $1.25 billion to China's 3SBio for rights to a cancer drug candidate.

Not long ago, China was a backwater for drug research. Its companies made pharmaceutical ingredients or lower-cost generic drugs. Its patients offered an opportunity for big drugmakers to sell medicines developed in the West.

Now it's a major player in biotechnology. Researchers and startups in China are racing to develop hot new medicines for cancer, weight-loss and other diseases. Many are on the cutting edge of molecular biology.

Hungary's Viktor Orbán Concedes Defeat in Election

BUDAPEST-Prime Minister Viktor Orbán conceded that he had lost Hungary's election on Sunday, as early results showed a stunning defeat for the politician who has ruled the country for 16 years and been an ally of President Trump.

Orbán, in a speech at his campaign headquarters, said he had congratulated his opponent, Péter Magyar, on his victory.

"Thank you for all your support, my friends," he said. "What today means for our homeland, we do not know, time will tell. In any case, we will serve our homeland even in opposition."

Trump Quietly Scraps His Own Playbook on China

When Pentagon officials last fall briefed President Trump on a draft of a bureaucratic defense strategy document, it framed China the same way it had for a decade: as the top security threat facing the U.S.

Trump balked and ordered his Pentagon deputy to rewrite it, according to three officials familiar with the exchange. When the administration's revised National Defense Strategy published in January, it offered instead a conciliatory tone toward Beijing.

"President Trump seeks a stable peace, fair trade, and respectful relations with China," an unclassified version of the document declares.

Nike Switches Up Its Innovation Leadership

Nike's chief innovation officer is leaving the sneaker company after less than a year in the job, the company said, amid signs that its turnaround efforts are sputtering.

Chief Executive Elliott Hill elevated company veteran Tony Bignell to the position last June, one of Hill's first moves as CEO to regain Nike's footing in the innovation race. Now Bignell, who Nike said is leaving to pursue his own creative and philanthropic interests, will be the third innovation chief to exit from the role in less than three years.

He will be succeeded by Andy Caine, Nike vice president and creative director for sportswear, effective Sunday, the company said. Like Bignell, Caine will report to Phil McCartney, whom Hill appointed to the newly created position of chief innovation, design and product officer last year.

CoreWeave, Anthropic Form AI Cloud Agreement

CoreWeave will use its cloud infrastructure to help run Anthropic's Claude artificial-intelligence models as part of a new partnership between the two companies that gives CoreWeave another frontier AI-model customer.

CoreWeave shares were up 5.1% to $96.73 in premarket trading.

The collaboration will initially focus on a "phased infrastructure roll-out with the potential to expand over time," CoreWeave said.

Alibaba's New AI Video-Generation Model Tops Global Ranking

Alibaba Group's new artificial-intelligence video-generation tool is leading a global ranking that tracks AI models' abilities, signaling Chinese companies' growing competitiveness in technology used in advertising, content creation and entertainment.

The model, called HappyHorse 1.0, has ranked No. 1 on third-party website Artificial Analysis' text-to-video leaderboard since it was released earlier this month.

But its provenance had been a mystery, and Alibaba didn't reveal itself as the developer until Friday.