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Restaurant owners and other small business executives soured on the economy in March.
Credit: Joshua Lott / The Washington Post via Getty Images

Key Takeaways

• Optimism among small business owners declined to its lowest since "Liberation Day" in March as the Iran war pushed up fuel prices.
• Still, business owners were significantly more optimistic than consumers, whose feelings about the economy and finances plummeted to an all-time low in April.

An index of sentiment among small business owners took a dive in March, though businesses remain more optimistic than consumers about the economy and their finances.

Optimism among small business owners fell in March to its lowest level since the "Liberation Day" tariff announcement last April, according to a survey released Tuesday by the National Federation of Independent Business.

NFIB's Small Business Optimism Index fell three points to 95.8, below the historic average of 98, as the Iran war drove fuel prices skyward and clouded the outlook for the future. An index measuring uncertainty rose to 92 from 88 in February, reaching its highest since September and remaining well above the historic average of 68.

The survey indicated that the Iran war and its accompanying fuel price hikes are leading small businesses to raise their own prices and keep hiring plans on the back burner. However, the attitude of business owners was relatively sunny compared to that of consumers, whose sentiment hit its lowest since at least 1952 in April, according to the long-running University of Michigan survey.

"The dramatic spike in oil prices has spooked consumers and owners alike," NFIB Chief Economist Bill Dunkelberg said in a statement accompanying the data release. "Small business owners are having to absorb those higher input costs and pass them along to their customers.”

What This Means For The Economy

With small business owners feeling gloomy about the economy, the recent slowdown in job creation is less likely to turn around any time soon.

The survey highlighted the cost pressures small businesses face from fuel price increases, on top of the price hikes they've already had to absorb from tariffs.

“The overall state of my business is good at the moment; however, with all the uncertainty in the economy (tariff surcharges, high freight charges, skyrocketing insurance rates, and the war with Iran), I feel to cover the increased cost, I may price myself out of the market," a retailer in Iowa told the NFIB. "Lowering prices is only an option if prices of inputs come down and that doesn’t look like it will happen in the near future.”

In a bad sign for the labor market, business hiring intentions hovered near rock-bottom levels. The percentage of businesses saying they would increase hiring minus those who said they would decrease stayed at 12%, the same as in February.

The survey is a relatively minor indicator of the health of the economy and economists tend to take it with a grain of salt because, like many other opinion surveys, it's influenced by partisan feelings.

"Small business owners also tend to lean Republican, which at times seems to lead to more upbeat readings when the GOP holds the White House, complicating longer-term comparisons," Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, wrote in a commentary. "That said, the March survey paints a dim picture."

Globalstar shares rallied earlier this month after deal talks with Amazon were first reported.
Credit: Patrick T. Fallon / AFP / Getty Images

Key Takeaways

• Amazon is buying Globalstar, in a bid to grow its Leo satellite internet service.
• Amazon will take over as the provider of emergency satellite services for Apple from Globalstar, which Apple bought a 20% stake of in 2024.

Amazon said it's agreed to buy Globalstar, putting an end to weeks of speculation and sending the Stalink rival's stock up sharply Tuesday.

Globalstar (GSAT) shares were over 10% higher in recent trading, while Amazon (AMZN) shares climbed 3% after the deal was announced, amid a broader market rally.

The move could help Amazon grow its Leo satellite internet network and compete with Starlink, the satellite internet service of Elon Musk's SpaceX. Amazon said it plans to launch a direct-to-device internet service through Leo in 2028, and partner with mobile providers to expand their coverage capabilities.

Globalstar shareholders will have the option of receiving 0.321 shares of Amazon stock or $90 in cash for each share of Globalstar stock they own. The $90 price represents upside of 31% to the stock's close on April 1, a day before The Financial Times reported deal talks were in progress.

Why This Matters to Investors

Tuesday's stock gains suggest investors are bullish on the deal's potential benefits for Amazon, while Globalstar shares are climbing toward the $90 price per share outlined in the deal.

Amazon said the deal has been approved by shareholders representing 58% of Globalstar's voting rights, and expects the deal to close sometime next year, pending regulatory approval.

Amazon also announced that it will take over as the provider of emergency satellite services for some Apple (AAPL) iPhone and Apple Watch models from Globalstar, which Apple bought a 20% stake of in 2024.

With Tuesday's gains, Amazon shares are up about 8% year-to-date, while Globalstar shares have added close to a third of their value.

Geopolitics, trade, and high public debt are among the risks threatening the economy, according to Jamie Dimon.
Credit: John Lamparski / Getty Images

Key Takeaways

• The U.S. economy remains resilient, but "an increasingly complex set of risks" threatens its stability, wrote Jamie Dimon, CEO of JPMorgan Chase, on Tuesday.
• Executives at many of America's largest banks have lately noted the economy's strength, but warn that the economy has yet to feel the full effects of high oil prices.

Despite a rough start to 2026, the U.S. economy is still standing. Tectonic shifts underfoot could change that, according to the heads of America's biggest banks.

“The U.S. economy remained resilient in the [first] quarter, with consumers still earning and spending and businesses still healthy,” wrote JPMorgan Chase (JPM) CEO Jamie Dimon on Tuesday. But it faces “an increasingly complex set of risks,” including geopolitical tensions, volatile energy prices, an evolving trade regime, large government debts, and high asset prices, Dimon wrote.  

Dimon’s comments echoed his annual letter to shareholders last week, in which he warned that even resilient economies have a “tipping point.” That warning came just before President Trump’s deadline for Iran to reopen the Strait of Hormuz or face “decimation,” when oil prices were at multi-year highs and investors struggled to see a way out of the Middle East conflict. A tenuous ceasefire has since pushed oil prices lower and buoyed stocks.

Why This Is Important

The U.S. economy has weathered an array of headwinds over the past year, including ever-shifting trade policy, geopolitical tensions, and uncertainty about the impact of AI. Bank executives see that resilience holding for now, but warn that an accumulation of economic pressures can have unpredictable consequences.

Goldman Sachs (GS) chief David Solomon struck a similar tone during his bank’s earnings call Monday. Solomon noted uncertainty created by the war had caused a slowdown in IPO activity and that an extended period of elevated oil prices would weigh on growth, though "at this point, the underlying economy still remains relatively robust.” 

“We still see continued resiliency in the underlying economy and the financial health of the consumers and businesses we serve remains strong,” wrote Charlie Scharf, CEO of Wells Fargo (WFC), in the bank’s quarterly results Tuesday. The economy has, however, yet to feel the full impact of higher oil prices, he warned.

Resurgent inflation is one of the biggest risks for which investors and economists are bracing, but economic data so far has painted a murky picture of the inflation outlook. Consumer prices rose 0.9% in March, a sharp increase driven by the largest one-month increase in energy prices on record. Yet wholesale prices, which can foretell where consumer prices are headed, increased half as much as economists expected last month. 

"The impact of the Middle East conflict is hitting Asia and Europe harder than countries such as the U.S. and Brazil, which are more insulated from energy shocks," Citibank (C) CEO Jane Fraser said Tuesday on a conference call, a transcript of which was provided by AlphaSense. "Clearly, the longer this goes on, the more pronounced the second or third order impacts are going to be around the world, and inflation is now a greater risk to growth and will likely cause central banks to lean towards more restrictive monetary policies."

Investors are hopeful that negotiations can deliver a lasting resolution of the U.S.-Iran conflict, which was paused by a two-week ceasefire last Wednesday. Stocks were sharply higher and oil prices lower Tuesday following reports that the U.S. has proposed a 20-year moratorium on uranium enrichment in Iran, a more modest ask than the permanent ban officials have publicly demanded.

With Tuesday's gains, the S&P 500 was trading not far off its record close.

This article has been updated since it was first published to add Fraser's comment and reflect market movements.

The Department of Education said it would resume a student loan forgiveness tracker.
Credit: Investopedia / Photo Composite by Elizabeth Guevara / Getty Images

KEY TAKEAWAYS

• After 20 or 25 years of payments or qualifying payment pauses, borrowers on income-driven repayment plans can receive forgiveness.
• The Department of Education will restore a payment counter that allows borrowers to track progress toward student loan forgiveness.
• The payment counter will help borrowers check their status after many significant student loan changes in 2025.

After almost a year without official payment counts, the Department of Education recently announced it is bringing back a tool to track student loan forgiveness.

Federal student loan borrowers on an income-driven repayment plan can have the remaining debt discharged after making qualifying monthly payments for 20 or 25 years, depending on the plan. The "IDR payment counter" on the Federal Student Aid website allowed borrowers to see how many payments they had made and how long it would take to receive forgiveness.

This tool was taken down in April 2025, but the Department of Education recently said it is updating its system to resume the payment counter.

Why This Matters

There are currently about 12.6 million federal student loan borrowers in an income-driven repayment plan. Since the COVID-19 pandemic, these borrowers have faced several changes to their repayment plan, which many say have confused and overwhelmed them. Knowing how far they are from forgiveness can provide some clarity about their debt.

However, the Department of Education has been inconsistent with its plans for the IDR payment counter.

Before the Biden Administration left the White House in late January 2025, it created the payment counter. That April, the Department of Education took the counter down.

A couple of months later, Secretary of Education Linda McMahon said the Department of Education planned to restore the counter soon. Yet, in December, the Education Department said it was no longer using the tool and had no plans to resume it.

The Department of Education has yet to respond to questions about an estimated date for when the IDR payment counter will be back up.

Why Is The Tracker Important?

Student loan borrowers have seen many significant changes to their repayment plans and forgiveness over the past year. The resumption of the payment tracker will help them understand how close they are to forgiveness after those changes.

The Department of Education will open a new income-driven repayment plan, the Repayment Assistance Plan, for borrowers to begin enrolling in on July 1, 2026. While monthly payments are lower under RAP than under other repayment plans for some borrowers, this plan delays forgiveness by five to 10 years compared to the existing income-driven repayment plans.

Once it's up, the payment counter can help borrowers understand if they are close to forgiveness and if moving to the RAP plan is worth it.

Additionally, the Saving for a Valuable Education plan, a Biden-era income-driven repayment plan, was ruled illegal in March.

The decision forces the almost 7.2 million borrowers still enrolled in the SAVE plan to move to another repayment plan and resume payments after being in forbearance for almost two years. Depending on which income-driven repayment plan they choose, their forgiveness date may be delayed compared to what it would have been under the SAVE plan.

In the same lawsuit, the district judge confirmed that time spent in certain types of forbearance and deferments counted toward the payment count for income-driven repayment forgiveness.

For borrowers in these specific forbearance and deferment programs, this change will increase the number of qualifying payments and bring them closer to forgiveness.

Credit: Jerome Powell, chairman of the US Federal Reserve, during a moderated conversation at Harvard University in Cambridge, Massachusetts, US, on Monday, March 30, 2026.

Key Takeaways

• Federal Reserve officials are widely expected to hold the central bank's key interest rate steady at their next meeting April 28 to 29.
• The Fed is worried the Iran war could cause higher inflation, and analysts have scaled back expectations for rate cuts at future meetings.
• The meeting could be Jerome Powell's last as chair of the central bank's board of governors.

The Federal Reserve's policy committee next meets April 28 and 29, and officials are expected to hold the central bank's key interest rate steady for the third meeting in a row.

The Federal Open Market Committee (FOMC) will meet to consider changes to the federal funds rate from its current range of 3.5% to 3.75%. The Fed held the rate steady at its January and March meetings. It cut the rate by a quarter point at each of its three meetings last fall, aiming to prevent a job-market slowdown from deepening. Since then, the Iran war has spiked energy prices and clouded the economic outlook.

Why This Matters

The Fed's rate decision and what the committee signals about its future moves will influence borrowing costs for loans, inflation, and the job market in the months ahead.

Fed officials have mostly taken a "wait-and-see" approach to assess how the economy will react to the Iran war. Financial markets are pricing in a 99% chance the Fed will hold the fed funds rate steady at its next meeting, according to the CME Group's FedWatch tool, which forecasts rate moves based on fed funds futures trading data.

The fed funds rate drives borrowing costs on credit cards and car loans, and also filters through to mortgages and other longer-term credit. Lower interest rates encourage spending and can help boost the economy, while higher interest rates reduce demand and help lower inflation.

The war threatens to undermine both sides of the Fed's dual mandate to keep inflation low and employment high, a concern Fed officials discussed behind the scenes at their March meeting.

In public communications, Fed officials have said they believe the central bank's policy committee should wait to see which poses a greater risk before responding, either by lowering rates to boost employment or by raising rates to stamp out inflation if it worsens. The second option was widely considered off the table before the war, with officials mainly debating when and how much they would cut rates.

The Last Ride of Fed Chair Powell?

April's meeting could be the last with Fed Chair Jerome Powell in charge, but that's not at all certain.

Powell's term as leader ends in May. However, Kevin Warsh, whom President Donald Trump has nominated as Powell's successor, needs to be confirmed by the Senate in time to helm the Fed's next meeting in June. If Warsh's confirmation is delayed, Powell has said he would stay on as Fed chair temporarily. He could also remain on the Fed's board as a regular member until 2028.

Powell's tenure as chair is tied to the power struggle between President Donald Trump and the Federal Reserve over the central bank's independence. Powell has said he won't leave the board of governors until the Department of Justice drops its investigation into alleged cost overruns in the Fed's headquarters renovation.

A key senator, Republican Thom Tillis of North Carolina, has vowed to block Warsh's nomination until the White House ends the probe. Warsh's confirmation hearing is scheduled for next week, according to the Senate Banking Committee's top Republican.

The Supreme Court is also considering whether to let Trump fire Federal Reserve Governor Lisa Cook. The high court heard oral arguments in the case in January and is expected to rule by June on whether the unprecedented firing can proceed.

The actions against Powell and Cook have raised questions about whether the Fed can remain independent of the White House. Economists say the Fed's independence is key to its credibility and its ability to manage inflation.

United and American shares have each declined this year as airlines have faced concerns like surging fuel costs.
Credit: Kevin Carter / Getty Images

Key Takeaways

• United Airlines CEO Scott Kirby has reportedly discussed the idea of United acquiring American Airlines with senior Trump administration officials.
• Such a deal could face antitrust concerns, as it would create the largest airline in the world with over $110 billion in revenue

Shares of United Airlines and American Airlines are taking off on reports of potential merger talks.

United Airlines (UAL) CEO Scott Kirby has pitched the idea of United acquiring American Airlines (AAL) to U.S. government officials, Bloomberg reported last night. Reuters later reported that the pitch came in a White House meeting with President Donald Trump in late February. American shares jumped close to 8% in recent trading, while United shares climbed about 2%.

Such a deal would likely face antitrust concerns, as it would create the largest airline in the world with over $110 billion in annual revenue, compared to the next largest in Delta Air Lines (DAL) with $63 billion in sales last year.

United declined to comment on the reports, and American did not respond to an Investopedia request for comment in time for publication.

Why This Matters to Investors

While it remains unclear whether United and American have held merger talks, Tuesday's gains suggest investors are bullish on the idea of a deal.

Airline deals have faced significant hurdles in recent years, with JetBlue (JBLU) and Spirit Airlines calling off a merger in 2024 after it was blocked by regulators. JetBlue has undertaken partnerships with American and United, and its previous collaboration with American was ruled as reducing competition by a judge in 2023.

Executives from both airlines could face questions about the reports from investors and analysts when they report earnings next week, with United's results due April 22 and American's set for April 23.

Even with Tuesday's gains, United and American shares are still down 13% and 20%, respectively, since the start of the year.

Oil prices can push up inflation on all kinds of products.
Credit: Joe Raedle / Getty Images

Key Takeaways

• Wholesale prices rose less than forecast in March despite a surge in gasoline prices from the Iran war's disruption to the oil market.
• "Core" inflation excluding food, energy, and trade was mild, rising less than half what forecasters were bracing for.
• The tamer-than-expected price hikes could defuse fears of a 1970s-style spiral of inflation.

If you were bracing for businesses to pass along higher costs from the Iran War-related fuel price hikes, the hit may not be as severe as previously thought.

The Producer Price Index for final demand, a measure of wholesale prices, rose 0.5% in March, the Bureau of Labor Statistics said Tuesday. The uptick was less than half of the 1.1% surge forecasters had expected, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal.

The increase was driven by an 8.5% rise in energy prices, the highest one-month jump since June 2022, but was counteracted by a 0.3% decrease in food costs and falling prices for scrap iron and natural gas. Outside of those energy costs, price increases were relatively tame: the "core" PPI excluding the volatile costs for food, energy, and trade, rose 0.2% over the month compared to the median forecast for a 0.4% increase.

What This Means For The Economy

If war-related inflation simmers down in the coming months, it could give he Federal Reserve cover to lower interest rates, reducing borrowing costs and giving a boost to the economy.

Economists watch producer prices closely because they are a leading indicator of what businesses will charge customers. March's figure is especially significant because it indicates the magnitude of the price increases from the Iran war's energy shock that must be passed along to consumers. If so, the hikes could prove to be milder than the worst-case scenarios.

"March’s inflation could have been much worse," David Russell, global head of market strategy at TradeStation, wrote in a commentary. "The Iran war triggered a spike in energy costs, but it may prove more of a one-off blip than the start of a 1970s-style inflationary spiral."

The PPI painted a more subdued picture of inflation pressures than the Consumer Price Index for that month, which tracks sticker prices actually paid by consumers. The CPI, released last week, showed record-breaking price hikes for fuel.

The outlook for inflation largely hinges on the peace talks between the U.S. and Iran, especially whether the crucial Strait of Hormuz waterway reopens to ship traffic. In normal times, about 20% of the world's oil supplies flow through the strait from Persian Gulf countries to global markets. The conflict has cut off that trade route, sending oil prices surging.

News of the day for April 14, 2026

With their gains on Monday, the Dow and S&P 500 moved into positive territory for 2026.
Credit: Michael M. Santiago / Getty Images

Stocks futures are slightly higher Tuesday as investors continue to hope for progress on a deal to end the Iran war; oil prices are losing ground despite a U.S. blockade of Iranian ports; JPMorgan Chase, Wells Fargo and Citigroup each reported earnings this morning; the Producer Price Index is expected to show the Iran war's impact on wholesale prices in March; and the CEO of United Airlines has reportedly discussed a potential effort to buy American Airlines with senior Trump administration officials. Here's what you need to know today.

Stocks Mixed, Oil Lower Amid Iran Deal Hopes

Futures tied to major U.S. stock indexes are pointing higher this morning as investors keep close tabs on negotiations to end the Iran war. Dow Jones Industrial Average futures were up 0.1% recently, while those linked to the S&P 500 and the Nasdaq added 0.3% and 0.5%, respectively. The major indexes all finished solidly higher on Monday, recovering from early-session losses after weekend peace talks between the U.S. and Iran failed to produce a deal. West Texas Intermediate futures, the U.S. crude oil benchmark, were down about 2% this morning at $97 per barrel (more on than below), while gold futures rose 0.7% to $4,800 an ounce. Bitcoin was at $74,400 after rallying yesterday, with the digital asset gaining nearly $4,000 in value in one day. The yield on the 10-year Treasury was little changed at 4.29%.

Oil Slips Despite US Blockade of Iranian Ports, IEA Forecast

Crude oil futures down this morning despite little progress in reopening the Strait of Hormuz, with a new U.S. blockade of Iranian ports potentially even slowing traffic through the key energy waterway. Reports emerged early Tuesday that Pakistani officials were looking to schedule a second round of talks between the U.S. and Iran in the coming days after the talks that took place over the weekend ended without a deal. The International Energy Agency also released its latest monthly oil industry report Tuesday, finding that oil production fell by 10 million barrels a day in the month of March. The IEA said global oil demand is expected to decline by 1.5 million barrels a day in the second quarter, which would be the biggest single-quarter drop since the COVID-19 pandemic. The agency said that "demand destruction will spread as scarcity and higher prices persist."

Big US Banks Report Earnings This Morning

Earnings season for big banks kicked into high gear Tuesday with JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) all posting first-quarter results. JPMorgan beat estimates in its report, with CEO Jamie Dimon saying that consumers are still spending, and noting that the economy faces "an increasingly complex set of risks." Wells Fargo's revenue and net interest income fell short of estimates, while the bank posted a slight profit beat. Citi's revenue and profits came in higher than analysts had forecast. Citi shares were up 2% in recent premarket trading, while JPMorgan fell slightly and Walls Fargo dropped 2%. Goldman Sachs (GS) was the first major financial insritution to report yesterday, beating revenue and profit estimates.

PPI Report to Show Effect of Iran War on Wholesale Inflation

Investors will get a look at the inflation that businesses are facing when the Producer Price Index (PPI) for March is released. The PPI report, due at 8:30 a.m. ET, is expected to show wholesale prices rose by 1.1% in March, up from 0.7% in February, according to a survey of economists conducted by Dow Jones Newswires and The Wall Street Journal. The Iran war has sent fuel prices soaring and has also sparked inflationary pressure for a wide variety of other goods. Last week, the Consumer Price Index for March showed that prices rose 3.3% year-over-year, with the 0.9% increase from February to March representing the biggest one-month jump since the pandemic.

United Airlines CEO Has Proposed Acquiring American, Report Says

Shares of a pair of air travel giants are gaining this morning, after a report from Bloomberg last night said that United Airlines (UAL) CEO Scott Kirby has pitched the idea of United acquiring American Airlines (AAL) to U.S. government officials. It's unclear if any talks have taken place between the airlines, and such a deal would likely face substantial antitrust concerns as it would create the largest airline in the world with over $100 billion in revenue, compared to the next largest in Delta Air Lines (DAL) with $63 billion in sales last year, per Bloomberg. Still, the news of a potential tie-up is boosting the stocks, with United shares up 3% and American rising 9% ahead of the opening bell.

TSMC shares have climbed over 20% since the start of the year
Credit: Bloomberg / Getty Images

Key Takeaways

• TSMC is slated to post earnings Thursday, with the stock seen potentially approaching record highs following the report.
• The chipmaking giant has already reported first-quarter sales above what analysts had forecast, as AI demand grows.

Taiwan Semiconductor Manufacturing Co. (TSM) is set to report earnings before the opening bell Thursday, with traders expecting the chip manufacturing giant's stock could near February's highs following the results.

Options pricing suggests TSMC shares are seen swinging up to about 5% in either direction by the end of the week. A move of that size from Monday's close could lift the stock to $386, hovering near its February highs. The low end of the range would pull shares down to $353.

Though the chipmaker's stock has pulled back from its record highs lately, it's still up more than 20% since the start of the year, after the company's last earnings report showed AI demand growing at a solid pace.

Why This Matters to Investors

A strong print from the world's largest contract chip manufacturer could be taken as a positive signal for the semiconductor industry.

TSMC has already posted its first-quarter sales. The company said on Friday that it generated 1.13 trillion New Taiwan Dollars ($35.76 billion) in revenue in the quarter, up 35% year-over-year and better than analysts had forecast. TSMC's first-quarter earnings per share are expected to come in at 20.73 New Taiwan dollars (65 cents).

Wedbush analysts on Friday said the first-quarter sales numbers suggest continued strength from AI demand, and could be viewed as a positive indicator for the outlook of TSMC's two biggest customers, Nvidia (NVDA), and Apple (AAPL).

Analysts are overwhelmingly bullish on TSMC's stock. All seven of the analysts with current ratings tracked by Visible Alpha have recommended buying the shares.

Economists say the U.S. economy is more resilient to oil price shocks than it was in the 1970s when an oil embargo spiked inflation and unemployment rates.
Credit: Chris J. Ratcliffe / Bloomberg via Getty Images

Key Takeaways

• Economists cut forecasts for U.S. economic growth and raised the specter of lingering inflation as the Iran war continues.
• Analysts expect the economy to bend, not break, under the stress, though that could change if the conflict isn't resolved soon.

The Iran war will saddle the U.S. and global economies with higher inflation, slower growth, and steeper borrowing costs for months, even if the conflict ends tomorrow.

That's the growing consensus among economic forecasters tallying the damage from the conflict Monday. Weekend peace talks in Islamabad, mediated by Pakistan, broke down Sunday after U.S. negotiators said Iran refused to abandon its nuclear program.

President Donald Trump responded by ordering a U.S. Navy blockade of Iranian ports that took effect Monday morning. The Strait of Hormuz itself remains largely closed as Iran restricts traffic and U.S. forces block vessels from Iranian ports and clear mines from the waterway.

Should the conflict continue much longer, the U.S. and global economy could plunge into recession, economists at Oxford Economics wrote in a commentary Monday.

What This Means For The Economy

The U.S. economy, though resilient, is taking serious hits from the Iran war, starting with a March inflation surge that is likely to ripple through other economic indicators.

In normal times, about 20% of the world's oil flows through the strait. With Iran still restricting traffic and the U.S. blockading Iranian ports, that supply has dried up, driving oil, gasoline, and diesel prices sharply higher.

As of Monday afternoon, Brent crude was trading for $98 a barrel, up from around $70 before the war. Americans are now paying an average of $4.13, up from $2.98 since the conflict began, according to AAA.

Oxford Economics cut its forecast for U.S. gross domestic product (GDP) growth by a third to 1.9%, Michael Pearce, chief U.S. economist, wrote in a commentary. He noted that consumers are spending less on other goods as gas eats up a bigger share of household budgets.

The economy had been gaining momentum heading into the war, Pearce wrote, boosted by about a 20% jump in individual tax refunds from last year's tax cuts and a rebound in manufacturing. But gasoline prices have climbed 40% since the fighting began, pushing inflation back above 3% and erasing the refund boost to household budgets.

"The increased cost of gasoline will soon offset the impact of higher tax refunds on consumers," Pearce wrote.

Oxford also cut its forecast for global GDP growth this year by 0.4% to 2.4%.

Oxford expects the war to boost U.S. inflation for the rest of the year, with consumer prices rising 3% in 2026. A record surge in energy prices already drove inflation higher in March, and Oxford expects further increases as transportation costs ripple through the supply chain.

Oxford's baseline assumes the strait reopens at about 50% capacity in May and June, returning to prewar levels over the following six months. A longer closure would push the U.S. and world economies into recession, their analysts concluded.

"While less severe than the pandemic or global financial crisis, the hit to growth would represent a larger, more coordinated slump than any other global downturn of the past 40 years," Ben May, director of global research at Oxford, wrote in a commentary.

The Oxford analysts fear more than a recession. If consumers come to expect continued price hikes, that can become self-fulfilling, a dynamic economists believe can entrench higher inflation. That could force central banks to keep interest rates higher.

"A sustained inflationary surge also risks de-anchoring inflation expectations, permanently raising long-term borrowing costs, and altering how monetary policy responds to future shocks," May wrote.

One buffer: the U.S. economy is less vulnerable to an energy shock than it was in the 1970s. In that era, an oil embargo against the U.S. led to fuel shortages, supercharged inflation, and suppressed growth on a scale few forecasters expect to happen again.

As Antonio Gabriel, global economist at Bank of America Securities, noted in a commentary Monday, the U.S. and global economies are less reliant on oil than several decades ago, and the U.S. now produces more oil than it consumes.

In the 1970s, a 10% rise in oil prices pushed inflation up by 0.9 percentage points; today it adds just 0.25 percentage points. The same price surge would have dragged U.S. GDP down 0.7 percentage points then, versus 0.05 percentage points now.

"A repeat of the 1970s appears an unlikely scenario, even if the war escalates," May wrote.

Still, any optimism hinges on a quick truce and a reopened strait—neither is assured. And even then, high energy prices are likely to linger.

"The fragile ceasefire seemingly reduces the risk of a far worse outcome," the Oxford economists wrote. "But even if a truce is maintained, it will take time for energy production and shipping traffic to return to normal levels."