U.S. markets climbed on Wednesday, with the S&P 500 up 0.7%, the Dow up 0.5%, and the Nasdaq up 1.2%. The gains were driven by hopes of easing tensions between the U.S. and Iran. But futures slipped after President Trump declared the war would end soon — while saying other nations must lead on reopening the Strait of Hormuz — so keep an eye on oil prices and weekly jobless claims data released this morning.

Two big forces are pulling markets in opposite directions right now. On the hopeful side, U.S.-Iran tensions appear to be cooling, which lifted stocks Wednesday. On the worrying side, Bank of America revised its economic forecasts to expect mild stagflation — that’s when the economy slows down while prices keep rising — and oil at $100 per barrel for the rest of the year, even if the war ends soon. Meanwhile, weekly jobless claims came in at 202,000, below the expected 212,000, signaling a still-strong job market.

A strong job market sounds great, but it gives the Fed less reason to cut interest rates anytime soon. For your portfolio, that means borrowing costs stay high and rate-sensitive stocks like tech could face headwinds if rate cuts keep getting delayed.

When the economy grows slowly (or stalls) while inflation (rising prices) stays stubbornly high at the same time. Why you care today: Bank of America now expects mild stagflation in the U.S. this year, which could squeeze both corporate profits and your purchasing power simultaneously.