* S&P 500 posts weekly gain in wake of worst quarter

since 2022

* March CPI report due April 10, expected to show some

effects of oil surge

* Delta, Constellation Brands ( STZ ) set to report, more Q1

results due later in month

By Lewis Krauskopf

NEW YORK, April 3 (Reuters) - A fresh read on inflation

and initial company results next week could start to show the

Middle East war's effects on the U.S. economy and corporate

America, as investors hope to start moving past a conflict that

has consumed markets.

Traders were wrestling with conflicting signals about a

potential winding down of the war that began over a month ago,

with the U.S.-Israeli military strikes on Iran.

The S&P 500 posted a gain in the holiday-shortened

week, snapping a five-week streak of losses. The benchmark index

earlier in the week closed its worst-performing quarter since

2022, weighed down since late February by the war and the

resulting surge in energy prices.

"It's going to be hard to get the market's attention off the

Middle East, oil prices and the risks that have emerged," said

Matthew Miskin, co-chief investment strategist at Manulife John

Hancock Investments. "The markets have been so myopically

focused on geopolitical risk and ... how all this is going to

shake out."

Stocks have stumbled this year, with concerns about

artificial-intelligence disruption and private credit weakness

compounding uncertainty over the Middle East conflict. The S&P

500 was last down nearly 6% from its late-January all-time high.

The war's impact on oil supplies and energy prices remained

the focal point for investors, especially the status of the

Strait of Hormuz, a critical Middle East oil-shipping channel

where traffic has stalled. U.S. crude topped $110 a

barrel on Thursday after the commodity earlier in the week

settled above $100 a barrel for the first time since 2022.

"The market is pricing off oil," said Doug Huber, deputy

chief investment officer at Wealth Enhancement Group. "Inflation

expectations, bond markets -- everything is stuck to this

concept of what oil is doing."

CPI TO JUMP, HIGH PRICES AT THE PUMP

Next week's consumer price index, a closely watched

inflation gauge, stands as an early test of the war's energy

shock. With U.S. crude jumping some 90% since the start of the

year, the U.S. average gasoline price rose above $4 a gallon

this week for the first time in more than three years.

"We think the first stage of oil price pass-through will

have arrived in March via motor fuel," BNP Paribas said in a

note previewing the CPI report.

The March CPI report, due on April 10, is expected to have

climbed 0.9% on a monthly basis, according to a Reuters poll as

of Thursday. Excluding energy as well as food prices, the "core"

CPI level is expected to have risen 0.3%.

Miskin said he would look for "ripple effects" across other

goods and services stemming from the war and energy-price surge,

while adding that the March report may be too soon to see any

broader inflationary impact.

"You're just trying to get as much real-time data as you can

to formulate where the inflation and economic growth trends are

going," Miskin said.

Q1 RESULTS LOOM, WITH BIG PROFIT HOPES

War-driven inflation worries have led markets to largely

rule out interest rate cuts this year, after such cuts had been

a key underpinning for many bullish stock outlooks.

"The market already has inflation on the brain," said

Patrick Ryan, chief investment strategist at Madison

Investments. If CPI were to "surprise with a much higher print,

that could also be something that the market would take

negatively."

Next week also brings the release of another inflation

measure, the personal consumption expenditures price index, but

that PCE data will cover February, a period largely before the

war took hold. An updated read of fourth-quarter U.S. economic

growth is also due, while investors will also analyze

Wednesday's release of the minutes from the Federal Reserve's

March meeting for any clues about the future path of rates.

The start of earnings season also will start grabbing Wall

Street's attention, with investors counting on a broadly strong

corporate profit outlook to support U.S. stocks this year. Delta

Air Lines ( DAL ) and beverage maker Constellation Brands ( STZ )

are among those due to report next week.

Those reports will offer a taste of the first-quarter

reporting season, which kicks off the following week. S&P 500

companies overall are expected to post a 14.4% rise in

first-quarter earnings from the year-earlier period, according

to LSEG IBES.

"The Q1 earnings season beginning in mid-April should show

that underlying earnings growth is still strengthening and

broadening," Deutsche Bank equity strategists said in a note.