Stocks closed mostly lower yesterday in uneven trade.

Oil was up nearly 6%.

Middle East headlines continue to influence prices. And concerns over Iran laying mines in the Strait of Hormuz, and firing on ships that travel it, are keeping the market on edge. Reports that three commercial ships were struck on Tuesday, only added to worries surrounding this important waterway.

In other news, Chubb was picked to be the lead underwriter for the U.S. government's war-risk insurance for transiting the Strait. Nobody has taken advantage of it just yet, as the physical danger appears to be outweighing the financial risk at the moment. But that could change.

The market will also be watching for when (if?) the G7 decides to release oil from their respective Strategic Petroleum Reserves (SPR) and IEA stockpiles. Earlier discussions centered around the release of 300-400 million barrels. The group is "ready to take necessary measures," but the decision on timing was to wait for now.

In other news, yesterday's MBA Mortgage Applications were up 3.2% w/w with purchases up 7.8% and refi's up 0.5%.

And the Consumer Price Index (CPI) retail inflation report came in as expected. Headline inflation was up 0.3% m/m vs. last month's 0.2%, but in line with expectations. On a y/y basis it was steady at 2.4%, in line with last month and views for the same. The core rate (ex-food & energy), was up 0.2% m/m vs. last month's 0.3% pace, but coming in as forecast. And the y/y rate was at 2.5%, same as last month, and in line with the consensus.

Yesterday's reading was for February, so the spike in oil was not reflected in these recent numbers.

Regardless, at that point in time, while inflation is still too high, the core rate is down from last year's high of 3.3%.

The next read on inflation will come on Friday with the Personal Consumption Expenditures (PCE) index, which is the Fed's preferred inflation report. That is expected to show the year over year rate holding steady at 2.9% headline, and 3.0% core.

In the meantime, today we'll get the Housing Starts and Permits report, International Trade in Goods and Services, Weekly Jobless Claims, and the Quarterly Services Survey.

Since the U.S./Israel campaign against Iran started (just under 2 weeks ago), the Dow is off -3.19%, the S&P is off -1.50%, the Nasdaq is actually up 0.21%, and the small-cap Russell 2000 is off -3.40%.

For those keeping score, crude oil is up about 30%.

In spite of all the volatility, not much of a move in equities (relatively speaking). Doesn't mean there won't be more. But doesn't mean there has to be either.

Regardless, it's important to remember that regional conflicts and events usually only have a short-term impact on the markets.

And with the underlying fundamentals of the economy showing great resilience, and corporate earnings outlooks for the S&P showing double-digit growth forecasts for the next four quarters, that bodes well for more gains to come.

So keep your eyes on the big picture.

See you tomorrow,