Equity markets started the week on shaky footing following a surprise attack by Hamas against Israel. The S&P 500 shed less than a full percent on the news and rebounded by the end of the session. The move suggests additional upside for the market this week, but there is risk. The CPI index is due out on Thursday and may show a surprise acceleration of inflation. Oil prices have corrected from their recent highs but remain well above 2023 average levels and will underpin inflation.

Oil was the big mover on Monday, gaining more than 4%. The advance shows support at the critical $85 price point and suggests that a rebound is underway. The move in oil is aided by violence in the Middle East. With tensions at historic highs, this conflict will certainly worsen before it improves and weigh heavily on the energy market.

The market also faces risk in the form of earnings. Friday starts peak earnings season and will bring reports from a half dozen US largest banks.