This Week on Wall Street: Trump Tariff Escalation, Nvidia Results, and Fed’s Key Inflation Gauge

Wall Street is entering a pivotal week as several critical developments threaten to sway investor sentiment. With tech giant Nvidia scheduled to release quarterly earnings and the Federal Reserve’s preferred inflation measure due Friday, the focus remains squarely on market fundamentals. At the same time, fresh tariff threats from President Donald Trump have reintroduced geopolitical friction into financial markets.

Last week saw broad declines across U.S. equities, ending a month-long rally that had boosted investor confidence. The S&P 500 slipped 2.6%, the Nasdaq Composite dropped 2.4%, and the Dow Jones Industrial Average posted similar losses as renewed concerns around fiscal policy and trade weighed on sentiment.

Trump’s Latest Tariff Warnings Add to Market Headwinds

President Trump reignited trade tensions on Friday, warning of a 25% tariff on Apple products not manufactured in the United States and threatening to double existing tariffs on European Union imports by June. While markets had digested prior trade-related headlines, this latest salvo unsettled investors and added downward pressure on stocks.

Bond markets reacted sharply earlier in the week, with the 30-year Treasury yield rising above 5.1%, nearing its highest level since 2007. The 10-year yield also surged past 4.6% before easing slightly on Friday. Strategists note that these moves are being driven by both inflation anxiety and fiscal deficit concerns, as markets adjust to the growing cost of government borrowing.

Michael Kantrowitz, chief investment strategist at Piper Sandler, highlighted that the latest tariff rhetoric compounds market fragility. “Markets need to see two things to regain footing—tariffs walked back and yields settling,” he said in a Friday note. He pointed to the 4.5% mark on the 10-year yield as a critical threshold, noting that rates above that level tend to weigh heavily on rate-sensitive sectors like small caps and housing.

Nvidia Results Could Shake Up the Tech Trade

Tech remains in sharp focus this week, with Nvidia (NASDAQ: NVDA) poised to report earnings on Wednesday after market close. The semiconductor leader has been a dominant force behind the AI investment boom and is widely seen as a bellwether for broader tech momentum.

Analysts polled by Bloomberg expect Nvidia to post earnings per share of $0.88 on revenue of $43.3 billion, a significant jump from last year’s $0.61 EPS on $26 billion in revenue. Given its weight in the S&P 500, Nvidia’s performance could influence market direction and set the tone for second-half tech expectations.

Nvidia has been treading water in 2025, with shares largely flat despite ongoing enthusiasm around AI. Fears over potential pricing pressure, increased competition, and macro uncertainty have kept investors cautious.

Since November 2022, following the launch of OpenAI’s ChatGPT, Nvidia has contributed nearly 17% of the S&P 500’s total gains, underscoring its influence in the current market cycle.

Inflation Data in Spotlight as PCE Release Nears

The next major economic checkpoint arrives Friday with the April Personal Consumption Expenditures (PCE) index, the inflation gauge most closely monitored by the Federal Reserve. Market participants are watching closely to see whether price pressures are easing or reaccelerating.

Consensus forecasts call for core PCE—which strips out food and energy—to rise 0.1% month-over-month and 2.5% year-over-year, down slightly from March’s 2.6%. The reading will serve as a key input for Fed policymakers ahead of the June FOMC meeting, where interest rate projections are due for an update.

Economists from Bank of America expect the May inflation data, to be released in June, will provide the first meaningful indication of how the latest tariff threats could affect consumer prices and corporate margins.

Earnings Season Nears Close with Strong Corporate Outlook

Nvidia’s report effectively wraps up first-quarter earnings season, which has outperformed expectations. With over 93% of S&P 500 companies having reported, aggregate earnings are on pace to grow 12.9% year-over-year, nearly double the forecasted 7.1% growth as of March 31, according to FactSet.

Despite ongoing economic and policy risks, corporate guidance has remained solid. Only eight companies have withdrawn full-year earnings guidance this quarter, far below the 185 who did so in the early stages of the pandemic five years ago.

That resilience has supported equity valuations and reinforced bullish outlooks from major Wall Street firms. Morgan Stanley’s Mike Wilson reaffirmed his year-end target for the S&P 500 at 6,500, citing improving earnings revisions and relative strength in U.S. companies versus global peers.

This Week’s Key Events: What Investors Should Watch

Monday, May 27

• U.S. Markets Closed (Memorial Day)

Tuesday, May 28

• Economic Data: FHFA House Price Index (March), S&P Case-Shiller 20-City Home Price Index, Conference Board Consumer Confidence (May), Durable Goods Orders (April), Dallas Fed Manufacturing Survey

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

Wednesday, May 29

• Economic Data: MBA Mortgage Applications, Richmond Fed Manufacturing Index, FOMC Meeting Minutes

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

Thursday, May 30

• Economic Data: Q1 GDP (Second Estimate), Personal Consumption (Q1), Initial Jobless Claims, Pending Home Sales (April)

• Earnings: Costco (COST), Dell (DELL), Best Buy (BBY), Ulta Beauty (ULTA), Gap (GPS), Marvell Technology (MRVL), Zscaler (ZS)

Friday, May 31

• Economic Data: PCE Inflation (April), Core PCE (April), University of Michigan Consumer Sentiment (Final - May)

• Earnings: Canopy Growth (CGC)

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