MARKET SENTIMENT: Investor sentiment was pressured on Friday as renewed inflation concerns weighed on risk appetite across equities, bonds, and commodities.
U.S.–CHINA TRADE OUTLOOK: Discussions following the Trump–Xi summit in China suggested an extension of the existing trade truce, though no major breakthroughs were announced. Talks remained broad, with attention also on Taiwan and Iran, while reports indicated a possible new Board of Trade framework aimed at roughly $30B in non-sensitive trade flows.
MIDDLE EAST CEASEFIRE UPDATE: Israel and Lebanon agreed to extend their ceasefire by 45 days, according to the U.S. State Department, following a U.S.-brokered agreement earlier in the year.
RATES & FIXED INCOME PRESSURE: Bond markets moved sharply higher, with the 2-year Treasury yield rising to 4.08% and long-end yields hitting multi-decade highs, including U.S. 30-year yields at their highest level since 2007. Global bond pressure also intensified, with Japan’s 30-year yield reaching 4% for the first time since 1999 and U.K. gilts climbing to 28-year highs.
INFLATION & ECONOMIC DATA: Inflation data reinforced stickier price pressures, with CPI rising 0.6% in April (3.8% YoY) and PPI jumping 1.4%, the largest monthly increase since 2022. Core inflation measures also came in above expectations, fueling concerns that inflation may remain elevated into 2027.
COMMODITIES & COST PRESSURES: Commodity markets were mixed to weaker, with copper, gold, and silver all declining sharply, while U.S. oil prices rose. Meanwhile, the average price of ground beef climbed to a record $6.90 per pound, highlighting ongoing consumer cost pressures.
TECH & GROWTH STOCK VOLATILITY: Semiconductor and AI stocks led the downside, with names like Marvell, Intel, Arm, and ASML all falling between 4–5%. Nvidia pulled back from recent highs amid mixed geopolitical signals around chip exports to China, despite continued long-term optimism around AI demand.
EARNINGS & CORPORATE MOVES: Applied Materials declined despite strong results, weighed down by broader sector weakness, while ServiceNow advanced alongside software peers. Cerebras surged 68% on its debut amid AI-driven enthusiasm. SpaceX shareholders approved a 5-for-1 stock split, and Boeing fell despite reports of a large China aircraft order.
CRYPTO & POLICY DEVELOPMENTS: Coinbase and Strategy advanced after progress on the Clarity Act in the Senate, which aims to establish a clearer U.S. regulatory framework for digital assets.
MARKET STRUCTURE & VOLATILITY: The S&P 500 tested a key resistance zone between 7,450–7,500, while support sits near 7,030. Volatility also picked up, with the VIX rising above 19, a level historically associated with elevated uncertainty.
FED POLICY EXPECTATIONS: Markets increasingly price in the possibility of a Federal Reserve rate hike, with CME FedWatch showing a meaningful probability of tighter policy amid persistent inflation pressures.
MARKET PULLBACK: U.S. equities declined as tech momentum faded and rising yields pressured valuations.
GEOPOLITICS: U.S.–China dialogue was constructive but lacked major breakthroughs, keeping trade tensions unresolved.
POLICY SHIFT RISK: Markets are now pricing a higher chance of Fed tightening as inflation surprises to the upside.
CORPORATE ACTION: Magnum Ice Cream surged on reports of potential private equity takeover interest.
Starbucks Cuts 300 Corporate Jobs as CEO Brian Niccol Expands Turnaround Effort
Starbucks announced Friday that it will eliminate approximately 300 U.S. corporate positions as part of a broader restructuring initiative aimed at streamlining operations and improving efficiency under CEO Brian Niccol’s turnaround strategy. A company spokesperson said the layoffs are intended to “sharpen focus, prioritize work, reduce complexity, and lower costs.” Starbucks also revealed plans to consolidate certain U.S. office locations and indicated that its international corporate structure is currently under review, signaling that additional job reductions could follow.
Berkshire Hathaway Reenters Airline Sector With $2.6 Billion Delta Investment
Berkshire Hathaway has returned to the airline industry for the first time since the pandemic, revealing a new $2.6 billion stake in Delta Air Lines as part of its latest quarterly regulatory filing. The investment makes Delta Berkshire’s 14th-largest holding as of the end of March and marks a significant reversal from Warren Buffett’s decision in 2020 to exit all U.S. airline positions during the Covid-19 crisis. At the time, Buffett argued that the pandemic had fundamentally changed consumer travel behavior and long-term industry dynamics.
Earnings Spotlight: Nvidia (NVDA)
Nvidia is expected to report its earnings on May 20th. Analysts currently project Nvidia's first-quarter revenue to come in at a record $78.50 billion, up nearly 80% year-over-year, while adjusted earnings per share are expected to more than double to $1.75, according to estimates compiled by Visible Alpha.
What's Ahead
NVIDIA, whose chips remain central to the AI buildout, is scheduled to report earnings this week. With the company now representing nearly 9% of the S&P 500, investors will closely watch both results and forward guidance.
Economic:
Monday (5/18): NAHB Housing Market Index, Net Long-Term TIC Flows
Tuesday (5/19): Building Permits, Housing Starts, Pending Home Sales
Wednesday (5/20): EIA Crude Oil Inventories, MBA Mortgage Applications Index
Thursday (5/21): Continuing Claims, EIA Natural Gas Inventories, Initial Claims, Philadelphia Fed Index
Friday (5/22): University of Michigan Consumer Sentiment
Earnings:
Monday (5/18): Agilysys Inc. (AGYS), Baidu Inc. (BIDU), iQIYI Inc. (IQ), Renew Energy Global PLC (RNW), Ryanair Holdings PLC (RYAAY), Trip.com Group Ltd. (TCOM), XP Inc. (XP)
Tuesday (5/19): Amer Sports Inc. (AS), Bilibili Inc. (BILI), CAVA Group Ltd. (CAVA), CMB TECH NV (CMBT), Eagle Materials Inc. (EXP), Home Depot Inc. (HD), Ke Holdings Inc. (BEKE), Keysight Technologies Inc. (KEYS), MakeMyTrip Ltd. (MMYT), Toll Brothers Inc. (TOL), ZTO Express Inc. (ZTO)
Wednesday (5/20): Analog Devices Inc. (ADI), EnerSys (ENS), GDS Holdings Ltd. (GDS), Hasbro Inc. (HAS), Intuit Inc. (INTU), Lowe's Companies Inc. (LOW), Nordson Corp. (NDSN), Nvidia Corp. (NVDA), Target Corp. (TGT), TJX Companies Inc. (TJX), Williams-Sonoma Inc. (WSM), Urban Outfitters Inc. (URBN)
Thursday (5/21): BJ's Wholesale Club Holdings Inc. (BJ), Copart Inc. (CPRT), Deckers Outdoor Corp. (DECK), Deere & Co. (DE), NIO Inc. (NIO), Ralph Lauren Corp. (RL), Ross Stores Inc. (ROST), Take-Two Interactive Software Inc. (TTWO), Walmart Inc. (WMT), Workday Inc. (WDAY), Zoom Communications Inc. (ZM)
Friday (5/22): Booz Allen Hamilton Holding Corp. (BAH), Global Ship Lease Inc. (GSL)
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