This earnings season could playing a pivotal role in helping to “clarify the path” ahead for financial markets, according to Quincy Krosby, LPL Financial’s chief global strategist.

Corporate earnings kicks into full gear this week with reports from major banking giants. The commentary and results should offer further insight into the state of the economy and whether a recession is on the horizon.

Investor attention remains laser-focused on whether corporate America “finds itself under pressure to the point that earnings suffer along with guidance, and that margin pressure compels them to cut costs, including layoffs,” Krosby wrote.

This time around, she said, Wall Street will be closely watching whether cyclical or defensive stocks lead the market higher from here. Earnings are also expected to decline before inching up in the second and third quarters, she added.

“The hope is that as markets get through the earnings season and digest guidance, and the possibility of another Fed rate hike in early May, that the bond market and equity markets will adjust and emerge more in sync,” she said. “Until then, the messages are seemingly disparate and confusing.”

— Samantha Subin

The banking industry is still in a fragile state as the Federal Reserve continues to hike benchmark interest rates, according to former Kansas City Fed chief Thomas Hoenig.

“We’re still concerned — they should be at least — about the condition of the banking industry overall,” Hoenig said on CNBC’s “Closing Bell.” “And you don’t want to make that part of the industry even more vulnerable by raising rates unless you absolutely have to.”

Despite the difficulty of adding to more turmoil by raising rates further, the central bank would also be acting prematurely by turning dovish, Hoenig added.

“Pivoting now would be way too soon,” he said.

— Brian Evans

Stock futures opened flat ahead of the release of March’s consumer price index.

Futures tied to the Dow Jones Industrial Average inched 19 points higher, or 0.06%, while S&P 500 and Nasdaq 100 futures traded flat.

— Samantha Subin