By Yasin Ebrahim

Investing.com – The S&P 500 struggled for direction Friday as a rebound in oil prices put inflation back in the spotlight at a time when data pointing to a pinched consumer and worries about aggressive Federal Reserve remain front and center.

The   fell 0.2%, the gained 0.2%, or 72 points, the fell 0.42%.

After reports of an Iranian-backed Houthi missile striking an Aramco oil facility in Saudi Arabia, oil prices have recovered from losses and turned positive.

As supply worries eased after US sanctions on Russian oil imports, rising tensions emerged in the Middle East.

“This averts concerns about a further tightening of supply for the time being,” Commerzbank said in a note early Friday.

Rising oil prices have kept inflation fears front-and center during a time consumers feel the pinch of rising prices.

The University of Michigan’s showed U.S. consumer sentiment deteriorated further in late March, falling to a reading of 59.4 from 59.7 earlier in the month.

Wall Street is betting that the Fed will raise its rates by 50basis points in the coming weeks due to the pace of inflation.Morgan Stanley said in a note

“We now look for the Fed to raise rates by 50bp at both its May and June meetings, with 25bp rate hikes penciled in for each meeting over the balance of the year,” {Morgan Stanley said in a note}.

Recent gains in U.S. Treasury yields were complemented by a 10.0% yield on the 10-year note, which surpassed 2.5% for nearly three years.

The banking stocks which are able to take advantage of a growing rate environment that boosts returns on loans were greatly boosted by the rising interest rates.

The gains were led by Comerica (NYSE;), Zions, (NASDAQ:), Lincoln National (NYSE)

The market’s other cyclical worries also contributed to the downturn. Industrials were supported by an ALK-led rise in airline stock prices.

Alaska Air Group (NYSE:) rose more than 3% after Bank of America backed the airline’s financial outlook, saying it was confident the low-cost airline can top the prior high single digit pre-tax margin expectation and reach its new long term target of 11% to 13%.

In big tech, meanwhile, Apple (NASDAQ:)  Alphabet (NASDAQ:), Amazon (NASDAQ:), Microsoft (NASDAQ:) and Meta Platforms (NASDAQ:) traded mixed.

In other news,  cannabis stocks surged, led by Tilray (NASDAQ:) and Aurora Cannabis (NASDAQ:) as the House of Representatives is set to vote on a bill to federally legalize marijuana next week. The House passed a version of this bill in December 2020. However, it failed to make it into the Senate.