In the forthcoming week, characterised by a reduction in trading days due to the holiday season, the financial markets are braced for a trio of pivotal developments that could steer investor sentiment and decision-making processes. At the heart of investors’ focus will be the release of the Personal Consumption Expenditures (PCE) inflation figures, the insights from the Federal Reserve’s Federal Open Market Committee (FOMC) minutes, and Nvidia’s financial performance report. These elements together herald a period of heightened scrutiny and potential volatility in the stock market.
Nvidia, a titan in the semiconductor industry known for its cutting-edge graphics processing units (GPUs), is poised for a spotlight moment, anticipated to unveil yet another remarkable earnings report. This anticipation is rooted in Nvidia’s strategic positioning at the fore of the burgeoning demand for artificial intelligence (AI) infrastructure. The financial results for the first quarter, expected to be disclosed after the market closes, are highly anticipated by investors and market analysts alike. The forecast suggests a significant uptick in both per-share earnings and revenue, underscoring Nvidia’s dominance in the AI chip market.
On the contrary, the outlook for Kohl’s, a mainstay in the American department store landscape, is notably less optimistic. The retailer, grappling with diminishing revenue streams and a bleak future perspective, presents a starkly contrasting investment narrative. Kohl’s is bracing for an earnings announcement that is expected to reveal the impacts of operational challenges and waning consumer interest in discretionary spending. These troubles are emblematic of the broader issues faced by traditional brick-and-mortar retailers struggling to adapt to the dynamic retail arena dominated increasingly by online commerce.
This juxtaposition of Nvidia’s thriving operation and Kohl’s struggle exemplifies the diverse outcomes within the U.S. stock market, influenced by technological advancements, consumer behaviour shifts, and the global economic climate. Nvidia’s potential to capitalize on AI’s relentless march, despite regulatory challenges, particularly in markets like China, contrasts sharply with Kohl’s struggle to rejuvenate its business model in a rapidly evolving retail environment.
This analysis unfolds in a week marked by anticipation over the core PCE price index, a critical measure of inflation closely watched by the Federal Reserve. The FOMC minutes are expected to shed light on the central bank’s view towards future interest rate adjustments, offering clues to investors about the economic landscape’s direction. Such macroeconomic indicators are crucial in shaping the investment climate, especially against the backdrop of uncertainties such as trade tensions and policy shifts.
U.S. markets, taking a brief pause for the Memorial Day holiday, are gearing up for these developments amid ongoing global economic concerns. Trade threats and tariff considerations, such as those announced by President Donald Trump targeting European Union imports and technology products like Apple’s iPhones, serve as a stark reminder of the fragile equilibrium within international commerce and its direct repercussions on the stock market.
As the week unfolds, the contrast between Nvidia’s potential for growth and Kohl’s challenges paints a broader narrative of transition within the U.S. economy, grappling with technological innovation’s pace, shifting consumer preferences, and the lingering spectre of inflation and trade disputes. This period, though brief, stands as a microcosm of the larger forces at play within the global financial markets, offering both caution and opportunity to investors navigating the complexities of modern investment landscapes.
Furthermore, as the investment community awaits these developments, tools like InvestingPro offer an invaluable resource for navigating the potentially tumultuous waters ahead. With features designed to identify stock winners, assess fair value, and filter the best investment opportunities based on comprehensive criteria, platforms like this represent the merging of technology and financial expertise, offering a beacon for both seasoned traders and novices.
In sum, the week ahead promises a confluence of factors that will test the resilience and adaptability of investors. From Nvidia’s poised excellence to Kohl’s anticipated struggles, the unfolding stories will likely serve as a microcosm of the broader economic and technological challenges and opportunities facing the global market today.
- PCE inflation data, Fed FOMC minutes, Nvidia earnings will be in focus in the holiday-shortened week ahead.
- Nvidia is a buy with earnings, guidance beat on deck.
- Kohl’s’ shrinking revenue, weak outlook make it a stock to sell.
- Looking for more actionable trade ideas? Subscribe here for 45% off InvestingPro!
The stock market ended lower on Friday after President Donald Trump made new trade threats, recommending 50% tariffs on European Union imports and considering a 25% tariff on any Apple (NASDAQ:) iPhones made outside the U.S.
Friday’s declines added to the market’s weekly losses. The declined 2.5%, the fell 2.6%, while the tech-heavy shed 2.5%. The small-cap gave up 3.5%.
Source: Investing.com
The holiday-shortened week ahead is expected to be an eventful one as investors continue to assess the outlook for the economy, inflation, interest rates and corporate earnings amid President Trump’s trade war. U.S. markets will be closed Monday for the Memorial Day holiday.
Most important on the economic calendar will be Friday’s core PCE price index, which is the Fed’s favorite inflation gauge. That will be accompanied by the minutes of the Federal Reserve’s May FOMC meeting. This could give some insight into the future path of interest rates.
Source: Investing.com
Elsewhere, in corporate earnings, Nvidia (NASDAQ:)’s results will be the key update of the week as the Q1 reporting season draws to a close. Other notable names lined up to report earnings include Salesforce (NYSE:), Dell (NYSE:), Costco (NASDAQ:), Best Buy (NYSE:), Macy’s (NYSE:), Kohl’s (NYSE:), Burlington Stores (NYSE:), and Dick’s Sporting Goods (F:).
Regardless of which direction the market goes, below I highlight one stock likely to be in demand and another which could see fresh downside. Remember though, my timeframe is just for the week ahead, Monday, May 26 – Friday, May 30.
Stock to Buy: Nvidia
Nvidia appears positioned for yet another impressive earnings report as the company continues to capitalize on the booming demand for AI infrastructure. Results for the first quarter are due after the market closes on Wednesday at 4:20PM ET. A call with CEO Jensen Huang is set for 5:00PM ET.
Market participants expect a sizable swing in NVDA shares following the print, with a possible implied move of about 7% in either direction, as per the options market.
Source: Investing.com
Analysts expect the chipmaker to report earnings of $0.73 per share for the quarter ended April 27, representing a 20% year-over-year increase. Revenue is projected to surge 66% to $43.2 billion, demonstrating the company’s continued dominance in the AI chip market.
The post-earnings call will likely focus on two critical areas that could serve as positive catalysts for the stock. First, investors will be closely monitoring Huang’s commentary regarding AI chip demand. Recent reports from cloud giants suggest AI investment remains robust, potentially supporting continued strong demand for Nvidia’s products.
Second, the market will seek clarity on production issues that have constrained supply in recent quarters. Any indication that manufacturing bottlenecks are easing could signal even stronger growth ahead as Nvidia works to fulfill its substantial order backlog.
Adding to the positive outlook, Reuters reported Saturday that Nvidia will begin production of a new, lower-level AI chip designed specifically for the China market in June. This move represents a strategic response to export restrictions imposed by the Trump administration earlier this year, which blocked the company from shipping its H20 processor to Chinese customers. The new chip could help Nvidia maintain access to the important Chinese market while complying with U.S. export controls.
Source: Investing.com
NVDA stock ended Friday’s session at $131.29, roughly 14% below its record high of $153.13 reached on January 7. At current levels, Nvidia has a market cap of $3.2 trillion, making it the second-most valuable company trading on the U.S. stock exchange – behind Microsoft (NASDAQ:). The shares are down 2% in 2025 after a 171% gain in 2024.
InvestingPro’s AI-powered quantitative model rates Nvidia with a ‘GREAT’ Financial Health Score of 3.74, painting a picture of a company firing on all cylinders, especially in profitability and growth.
Be sure to check out InvestingPro to stay in sync with the market trend and what it means for your trading. Subscribe now for 45% off and position your portfolio one step ahead of everyone else!
Stock to Sell: Kohl’s
Kohl’s, on the other hand, is a stock to avoid this week as it faces a challenging retail landscape. The department store chain is grappling with operational inefficiencies and weakening consumer demand, particularly for discretionary items.
The brick-and-mortar retailer, which operates over 1,100 stores across the U.S., is scheduled to release its first quarter earnings before the U.S. market opens on Thursday at 7:00AM ET. According to the options market, traders are pricing in a massive swing of 14.6% in either direction for KSS stock following the print.
Source: InvestingPro
Wall Street expects Kohl’s to post a loss of -$0.46 per share, a significant decline from last year’s loss of -$0.24 per share, with revenue projected to drop 11.5% annually to $2.99 billion.
Several fundamental issues are weighing on Kohl’s (NYSE:) performance. The company has become increasingly reliant on discounting to drive store traffic, a strategy that continues to erode profit margins in an already low-margin business. This promotional activity suggests underlying weakness in consumer demand for the retailer’s merchandise assortment.
Operational inefficiencies compound these market challenges, with the company facing inventory management issues and store productivity concerns. Unlike specialty retailers that have aggressively rationalized their store bases, Kohl’s continues to maintain a large physical footprint that may be increasingly difficult to justify given shifting shopping patterns.
Faced with a worsening economic backdrop and increasing competition from online retailers, Kohl’s lacks a clear catalyst for a turnaround.
Source: Investing.com
KSS stock –which fell to the lowest level since 1997 last month at $6.04– closed at $7.48 on Friday. Shares have plummeted 46.7% year-to-date, reflecting mounting investor concerns about Kohl’s long-term prospects as it struggles to adapt to the evolving retail landscape.
It should be noted that Kohl’s has an InvestingPro Financial Health Score of 1.96, tagged as merely ‘FAIR’, highlighting the company’s difficulty in attracting customers and driving sales.
Whether you’re a novice investor or a seasoned trader, leveraging InvestingPro can unlock a world of investment opportunities while minimizing risks amid the challenging market backdrop.
Subscribe now and instantly unlock access to several market-beating features, including:
- ProPicks AI: AI-selected stock winners with proven track record.
- InvestingPro Fair Value: Instantly find out if a stock is underpriced or overvalued.
- Advanced Stock Screener: Search for the best stocks based on hundreds of selected filters, and criteria.
- Top Ideas: See what stocks billionaire investors such as Warren Buffett, Michael Burry, and George Soros are buying.
Disclosure: At the time of writing, I am long on the S&P 500, and the via the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Invesco Top QQQ ETF (QBIG), and Invesco S&P 500 Equal Weight ETF (RSP).
I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.
