The S&P 500 (^GSPC 0.40%) has rebounded 18% since hitting bottom in early April after President Trump announced his "Liberation Day" tariffs. The index rocketed higher on Tuesday, May 27, as trade tensions eased between the European Union and the United States. But the stock market still faces several hurdles this week.
Specifically, Nvidia (NVDA 3.23%) will announce its first-quarter financial results after the market closes on Wednesday, May 28, and the Federal Reserve will publish the minutes from its May meeting earlier that same day. Then the Commerce Department will release PCE inflation and consumer spending data for April on Friday, May 30.
Here's what investors should know.
Nvidia will announce first-quarter financial results on May 28
Nvidia will report its earnings results for the first quarter of fiscal 2026 on Wednesday, May 28. The company guided for 65% sales growth and 49% non-GAAP (generally accepted accounting principles) net income growth. But many analysts have downwardly revised their estimates during the last three months due to concerns about chip export restrictions and tariffs. The Wall Street consensus currently implies earnings will increase 44% to $0.88 per diluted share.
Investors should pay close attention to gross margin. Nvidia's gross margin narrowed three percentage points to 73.5% in the fourth quarter, and company guidance says that number will contract further to 71% in the first quarter. Gross margin can be a proxy for pricing power, and Nvidia's has been slipping due to the costly ramp-up of its Blackwell GPU. CFO Colette Kress says gross margin should return to the mid-70% range "late this fiscal year."
Importantly, options traders are currently pricing in a good amount of volatility post-earnings. The market expects Nvidia stock to move about 6% after the report, which implies a closing share price between $123 and $140 on the next day. An earnings beat is no guarantee Nvidia shares will move higher. If management gives a gloomy outlook concerning export restrictions or tariffs, the stock could drop. And that downward momentum could spread to other semiconductor stocks and technology stocks.
Image source: Getty Images.
The Federal Reserve will publish the minutes from its recent meeting on May 28
The Federal Open Market Committee (FOMC), the policymaking arm of the Federal Reserve, concluded its latest two-day meeting on May 7. Officials left the benchmark interest rate unchanged, but the minutes from the meeting will be published on Wednesday, May 28.
Importantly, the minutes from the March meeting detailed concerns about tariffs imposed by President Trump, saying: "Participants assessed that the uncertainty around the economic outlook had increased, with almost all participants viewing risks to inflation as tilted to the upside and risks to employment as tilted to the downside."
Those conditions -- rising prices in combination with higher unemployment and slower economic growth -- are symptoms of stagflation. Numerous economists have warned tariffs will lead to stagflation, and the market is especially worried about that outcome because it would be a no-win situation for the Federal Reserve.
Policymakers could cut interest rates to support the labor market and prevent a recession, but lower rates would make inflation worse. Alternatively, policymakers could raise interest rates to curb inflation, but higher rates would further suppress economic growth and lead to greater unemployment.
Tariffs imposed by the Trump administration have not yet had a material impact on the economy, but investors will undoubtedly scrutinize the minutes from the FOMC's May meeting for insight into what Fed officials expect in the coming months. Any bad news could send stocks lower, but reassuring news could give the market a boost.
The Commerce Department will release updated PCE inflation and consumer spending data on May 30
The Personal Consumption Expenditure (PCE) price index is the Federal Reserve's preferred inflation gauge. Unlike the Consumer Price Index (CPI), which measures inflation based on urban consumers' out-of-pocket spending, the PCE price index includes urban and rural consumers, as well as spending done on consumers' behalf. For instance, health insurance paid by an employer on behalf of employees would only show up in PCE inflation.
The Commerce Department will release updated PCE figures at 8:30 a.m. ET on Friday, May 30. The consensus estimate says PCE prices rose 2.2% year over year in April 2025. If accurate, that would be the lowest number since 2.1% in September 2024. Stocks could swing lower if the actual reading is materially higher than the consensus because it would suggest tariffs are causing price increases across the economy.
The Commerce Department will also release consumer spending data at the same time. The consensus estimate says consumer spending rose 0.2% month over month in April 2025. If accurate, that would be the lowest number since 0% in January 2025. Stocks could swing lower if the actual reading is materially lower because it would suggest tariffs are causing consumers to spend less, and consumer spending is the largest driver of economic growth.
