Nvidia earnings, Trump tariff updates, and the Fed's preferred inflation gauge: What to know this week

Updated Sun, May 25, 2025

Stocks' feverish rebound over the past month is now on pause as growing concerns about the fiscal deficit have sent Treasury yields roaring higher and President Trump is once again threatening to escalate tariffs.

On Friday, Trump threatened to place a direct 25% tariff on Apple products not made in the US while also warning he'd ramp up duties on the European Union to 50% at the start of June. This solidified a week of decline for stocks as the Nasdaq Composite (^IXIC) and Dow Jones Industrial Average (^DJI) dropped about 2.4%. Meanwhile, the S&P 500 (^GSPC) slid roughly 2.6% on the week.

In the week ahead, updates on the trade war and Trump's pending tax bill will remain in focus, while quarterly results from Nvidia (NVDA) are expected to take center stage on Wednesday after the market close. Reports from Okta (OKTA), Salesforce (CRM), and Costco (COST) will also receive investor attention.

The release of the Federal Reserve's preferred inflation gauge on Friday will headline the economic data schedule. Markets will be closed on Monday for Memorial Day.

Tariff escalation

President Trump's policies have continued to drive markets. Concerns over Trump's tax bill boosting the government deficit have pushed Treasury yields higher. At over 5.1%, the 30-year Treasury yield (^TYX) had been hovering near its highest level since 2007, while the 10-year Treasury yield (^TNX) had pressed above 4.6%, its highest level since February.

But the sell-off in bonds eased on Friday as Trump once again threatened to escalate tariffs, sending a reminder to investors that even with a 90-day tariff pause on a wide swath of countries, the trade policy whipsaw in markets is far from over.

"Safe to say for the time being we’ve hit 'trough' trade uncertainty," Piper Sandler chief investment strategist Michael Kantrowitz wrote in a note to clients on Friday. "At this point markets need to see these tariffs retracted AND bond yields to not spike again for any material move higher."

Friday's decline in treasuries sent the 10-year below the key 4.5% level Kantrowitz has been watching. As Kantrowitz highlights in the chart below, once the 10-year Treasury yield has risen above 4.5%, interest rate-sensitive stocks have seen increased underperformance in recent years.

This played out in last week's market action with the Russell 2000 Index (^RUT), which has many companies with more interest rate exposure than the S&P 500, falling nearly 4% compared to the S&P 500's 2.6% decline.

The AI leader reports

Nvidia is set to report quarterly results on Wednesday after the market close. Investors will be closely watching for any updates on demand from the leading supplier of AI chips. For the quarter, Nvidia is expected to report adjusted earnings per share (EPS) of $0.88 on revenue of $43.3 billion, according to Bloomberg analyst consensus data. The company reported adjusted EPS of $0.61 on revenue of $26 billion in the same period last year.

Given Nvidia's position as one of the top holdings in the S&P 500, investors will also be watching how the report affects other tech stocks and the broader market. Shares of Nvidia are roughly flat this year after whipsawing amid growing fears of AI competition and tariff concerns.

Since the launch of ChatGPT in November 2022, Nvidia alone has accounted for about 17% of the S&P 500's gains.

Price check

Tariffs have increased fears that inflation could spike again. But there's been little evidence of a resurgence thus far in economic data, and economists expect a similar story to play out in the coming week.

A fresh look at a key inflation measure will come on Friday with the April PCE release. Economists project annual "core" PCE — which excludes the volatile categories of food and energy — to have clocked in at 2.5% in April, down from the 2.6% seen in March. Over the prior month, economists project "core" PCE at 0.1%, above the 0% seen the month prior.

BofA senior US economist Aditya Bhave wrote in a note to clients that the May inflation data, which will be released in June, will likely provide the "first read" of how tariffs are impacting prices.

Guidance remains

Nvidia's earnings report will effectively mark the end of the first quarter reporting period for S&P 500 companies. With 93% of the index done reporting, S&P 500 companies are on pace to have grown earnings by 12.9% compared to the prior year, far above the 7.1% expected on March 31, per FactSet senior earnings analyst John Butters.

Butters's latest earnings research also showed that one of Wall Street strategists' looming fears heading into the reporting period never came to fruition. Despite heightened policy uncertainty, just eight companies withdrew their full-year earnings per share guidance. This is far lower than the 185 companies that withdrew guidance in the first quarter five years ago as the pandemic clouded the corporate operating outlook.

Confidence in corporates' ability to navigate tariffs has been a key theme backing the recent rally in the market and the reason strategists like Morgan Stanley chief investment officer Mike Wilson see stocks finishing 2025 higher.

"We continue to prefer US over international equities as earnings revisions start to inflect higher for the S&P 500 relative to MSCI ACWI Ex US (CWI)," Wilson wrote while defending his year-end S&P 500 target of 6,500.

Weekly Calendar

Monday

Markets are closed for Memorial Day.

Tuesday

Economic data: FHFA house price index, month over month, March (+0.1% prior); S&P CoreLogic CS 20-city year over year, non-seasonally adjusted, March (4.5% prior); Conference Board Consumer Confidence, May (87 expected, 86 prior); Durable goods orders, April preliminary (-8.2% expected, +7.5% prior); Capital goods orders non-defense excluding air, April preliminary (0.1% prior); Dallas Fed manufacturing activity, May (-35.8 prior)

Earnings: AutoZone (AZO), Box (BOX), Okta (OKTA)

Wednesday

Economic data: MBA Mortgage Applications, week ending May 23 (-5.1% prior); Richmond Fed manufacturing index, May (-13 prior); FOMC meeting minutes, May meeting

Earnings: Nvidia (NVDA), Abercrombie & Fitch (ANF), BMO (BMO), C3.AI (AI), Dick's Sporting Goods (DKS), e.l.f. Beauty (ELF), Macy's (M), Salesforce (CRM)

Thursday

Economic data: First quarter GDP, second revision (-0.3% annualized rate expected, -0.3% previously); First quarter personal consumption, second revision (+1.8% previously); Initial jobless claims, week ended May 24, (227,00 previously); Pending home sales month over month, April (+6.1% previously)

Earnings: American Eagle (AEO), Best Buy (BBY), Burlington Stores (BURL), Build-a-Bear Workshop (BBW), Costco (COST), Dell (DELL), Foot Locker (FL), Hormel Foods (HRL), Gap (GAP), Marvell Technology (MRVL), Ulta (ULTA), Zscaler (ZS)

Friday

Economic data: PCE inflation, month over month, April (+0.1% expected, 0% previously); PCE inflation, year over year, April (+2.2% expected, +2.3% previously); "Core" PCE, month over month, April (+0.1% expected, 0% previously); "Core" PCE, year over year, April (+2.5% expected; +2.6% previously); University of Michigan consumer sentiment, May final (50.8 prior)

Earnings: Canopy Growth (CGC)