Global Highlights for This Week : Nvidia Earnings and Fed Minutes Take Center Stage in Crucial Test for Wall Street
Following Friday’s pullback, the recent momentum in U.S. equities has slowed.
Among the three major benchmarks, the Dow Jones Industrial Average and the Nasdaq Composite both posted modest losses last week, while the S&P 500 managed a minor gain.
Even so, the S&P 500 has surged nearly 17% from its late-March low and is up more than 8% since the start of 2026.
This rally has been primarily driven by semiconductor stocks, with the memory sector leading the charge.
Following this sharp run-up, a growing number of investors believe the market may be due for a temporary breather.
Concerns are mounting that the recent gains have been driven by a narrow cluster of mega-cap stocks, suggesting the market’s foundation may be less secure than index levels imply.
According to LSEG data, as of last Thursday's market open, only about one-fifth of S&P 500 constituents have outpaced the broader index since the March 30 low.
Patrick Ryan, Chief Investment Strategy Officer at Madison Investments, noted: "Once again, it’s a handful of stocks driving the headline index returns. When so many stocks are being left behind, it isn't definitionally a healthy market."
Consequently, high stakes are riding on this week. Nvidia is set to report its earnings with the market trading near record highs, alongside a wave of consumer-facing giants like Walmart, all while U.S. consumer confidence languishes at historic lows.
Nvidia will release its quarterly results after the closing bell this Wednesday, effectively bringing the first-quarter earnings season to its final stretch.
As the world's most valuable company, Nvidia—along with its semiconductor peers—has been the primary locomotive for the broader market in recent weeks.
Since its March low, Nvidia has jumped 36%, while the Philadelphia Semiconductor Index (SOX) has surged over 60% during the same period.
Allen Bond, Portfolio Manager at Jensen Investment Management, stated: "The market wants to see evidence from Nvidia that justifies its valuation and proves it can consistently monetize the growth in data center spend. Investors will treat this report as a proxy for the health of the entire tech ecosystem."
Yung-Yu Ma, Chief Investment Strategist at PNC Asset Management, added that a critical question for the market is whether competitors are beginning to erode Nvidia’s dominant market share.
This week will also provide a vital window into the state of the American consumer. Walmart, the world's largest retailer, is scheduled to report its quarterly results ahead of Thursday's opening bell, followed by earnings from Target, Home Depot, and TJX.
Investors worry that war-related inflationary pressures are starting to dent consumer spending, which accounts for more than two-thirds of the U.S. economy.
Data released last week showed that both U.S. consumer and wholesale prices remain elevated, with the April Producer Price Index (PPI) logging its largest increase since March 2022.
Earlier this month, the national average price for gasoline surpassed $4.50 per gallon for the first time in nearly four years.
On the macroeconomic front, the minutes from the Federal Reserve's April monetary policy meeting will be released on Thursday, potentially offering fresh clues on the trajectory of interest rates.
At the April meeting, the Fed held rates steady, but three dissenting officials opposed maintaining the "easing bias" language in the policy statement. Investors will scan the minutes to gauge whether the central bank is shifting toward the view that rate cuts are off the table as inflation reaccelerates.
U.S. money markets currently imply a 64% probability of a 25-basis-point rate hike by year-end and have fully priced in at least one hike by March 2027.
Additionally, markets will track Thursday's preliminary May manufacturing and services PMI data to assess whether corporate confidence remains resilient in the face of high energy costs and Middle East uncertainty.
Key Global Economic Events This Week:
Monday (May 18): G7 Finance Ministers and Central Bank Governors Meeting (through May 19); U.S. May NAHB Housing Market Index.
Tuesday (May 19): Japan Q1 GDP; Eurozone March Seasonally Adjusted Trade Balance; U.S. April Pending Home Sales Index.
Wednesday (May 20): U.S. Weekly API/EIA Crude Oil Stockpiles; Eurozone April CPI.
Thursday (May 21): Preliminary May Manufacturing/Services/Composite PMIs for France, Germany, Eurozone, UK, and U.S.; Federal Reserve Releases Monetary Policy Meeting Minutes.
Friday (May 22): Japan April CPI; U.S. May University of Michigan Consumer Sentiment Index (Final); Germany Q1 GDP (Final).