Introduction: A Packed Week of Market-Moving Events

Active traders are bracing for a condensed yet highly impactful week ahead, with the U.S. markets observing the Memorial Day holiday on Monday, May 26. The subsequent four days will be densely packed with crucial earnings releases from market bellwethers and influential players across various sectors, alongside a slate of significant macroeconomic data releases. This confluence of company-specific news and broader economic indicators is poised to inject considerable volatility and present numerous trading opportunities.

The spotlight will be firmly on earnings reports from giants like NVIDIA, whose results are a key barometer for the artificial intelligence (AI) sector, and Salesforce, a leader in cloud software. Retailers such as Costco, Dick's Sporting Goods, and Abercrombie & Fitch will offer insights into consumer health and spending patterns. AutoZone's report will shed light on the automotive aftermarket, while Dell Technologies will provide further perspective on AI infrastructure and the PC market.

On the macroeconomic front, the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, will be paramount in shaping expectations for future monetary policy. Additionally, the second estimate of Q1 GDP, consumer confidence figures, and the FOMC meeting minutes will provide further clarity on the economic landscape. Global indicators from China and Europe will also add to the complex tapestry of market drivers. This newsletter aims to equip Lightspeed Financial Services Group clients with a comprehensive overview of these key catalysts.

Earnings Spotlight: Key Companies Reporting Next Week

The upcoming week features a series of high-stakes earnings announcements. Below is a summary of the key companies on our radar, their expected reporting times, consensus estimates, and the pivotal narratives traders should monitor.

AutoZone Inc. (AZO) - Reporting Tuesday, May 27, Before Market Open (BMO)

The Street's Expectations: Analysts anticipate AutoZone to report earnings per share (EPS) around $36.78 on revenues of approximately $4.4 billion for its third quarter of fiscal 2025. Some analysts have slightly higher expectations, with Benzinga noting a consensus of $37.00 EPS and $4.41 billion in revenue, and Bank of America forecasting $38.15 EPS. These figures suggest slight year-over-year EPS growth (0.25% based on $36.78 EPS) and revenue growth of about 3.95%.

Key Narratives & Analyst Focus Areas: The focus will be on the continued strength of AutoZone's Do-It-Yourself (DIY) and commercial (Do-It-For-Me - DIFM) businesses. Analysts expect same-store sales growth of around 1.3% for the quarter. Progress on the company's mega hub expansion strategy (aiming for over 200, with 111 at Q2 end and 19 more planned in Q3/Q4 FY25) and international store openings (around 100 in FY25) will be closely watched as key growth drivers. The performance of peers like Advance Auto Parts (AAP), which reported a narrower-than-expected loss and beat revenue estimates for Q1 2025, and O'Reilly Automotive (ORLY), which missed Q1 EPS and revenue estimates, will provide context.

Recent Analyst Actions & Price Target Shifts: Bank of America Securities upgraded AZO to "Buy" from "Neutral" on May 21, increasing its price target by over 23% to $4,800, citing rising new and used car prices supporting the industry outlook. Wells Fargo maintained an "Overweight" rating and raised its price target from $3,850 to $4,200 on May 19. Truist Securities maintained a "Buy" and lifted its target to $3,995 on May 6. Goldman Sachs upgraded the stock to "Neutral" from "Sell" and boosted its price target to $3,811 on April 1. Overall, MarketBeat.com indicates an average "Buy" rating with a consensus target price of $3,837.82.

Noteworthy Historical Post-Earnings Stock Behavior: AutoZone has a mixed recent history of earnings surprises, beating EPS estimates in one of the trailing four quarters and missing three times, for an average negative surprise of 3.23%. In Q2 FY25, AZO missed EPS estimates ($28.29 vs. $29.16 consensus). Stock price reactions have varied, with data showing both positive and negative moves post-earnings over different periods. For instance, after the February 28, 2025 report, the stock saw a 3.49% increase over the following week. The stock's beta is relatively low at 0.32, suggesting lower volatility compared to the broader market.

The automotive parts retail sector is currently navigating an interesting dynamic. While economic pressures might lead some consumers to defer new vehicle purchases, thereby increasing demand for maintenance and repair parts for older vehicles, those same pressures could also lead to deferral of non-essential repairs. AutoZone's ability to effectively serve both the DIY and commercial segments, coupled with its strategic expansion of "mega hubs" for better parts availability, will be critical. The company's consistent sales growth over 35 years provides a strong historical precedent, but recent earnings misses highlight the challenges. The significant price target increase from Bank of America, based on the premise of rising car prices benefiting the aftermarket, suggests some analysts see a favorable macro tailwind that could help AutoZone overcome recent inconsistencies and drive future growth. Traders will be keen to see if this Q3 report validates that optimism, particularly in same-store sales and commercial segment growth.

NVIDIA Corporation (NVDA) - Reporting Wednesday, May 28, After Market Close (AMC)

The Street's Expectations: Consensus EPS estimates for NVIDIA's Q1 FY26 (ending April 2025) vary slightly but generally point to significant year-over-year growth. Zacks has a consensus of $0.81, while other sources cite figures like $0.73, $0.82, and $0.85. This represents a substantial increase from the $0.58 reported in the year-ago quarter. Revenue forecasts are also robust, clustering around $43 billion. Pepperstone notes an analyst central case of $43.36 billion (+10.3% q/q), Visible Alpha cites $43.2 billion, Kiplinger $43.2 billion, Moomoo $43.152 billion, and Zacks $42.64 billion. This would be a YoY increase of approximately 64-66%.

Key Narratives & Analyst Focus Areas: The primary focus remains on NVIDIA's Data Center segment, which is the main engine of its growth, fueled by insatiable demand for AI and cloud computing solutions. Analysts project Data Center revenue around $38.48 billion to $39.1 billion for Q1. Gross margins are another critical metric, with company guidance for Q1 FY26 non-GAAP gross margins around 71.0% (plus or minus 50 basis points); analysts will watch if margins are impacted by costs associated with ramping up new chips like the GB200 and GB300. The demand trajectory for the new Blackwell architecture and GB200/300 systems is paramount. Gaming revenue, expected around $2.80 billion, and performance in other segments like Professional Visualization and Automotive will also be scrutinized. The impact of U.S. export restrictions to China remains a concern, with some analysts citing potential lost revenue. Forward guidance for Q2 FY26 will be critical, with consensus expectations for revenue around $46 billion to $46.51 billion.

Recent Analyst Actions & Price Target Shifts: Analyst sentiment remains largely bullish. Stifel reiterated a "Buy" rating and $180 price target on May 23, expecting largely inline results despite H20 restrictions, and noting significant acceleration into 2H driven by Middle East expansion. Bank of America also reiterated a "Buy" on May 23 and earlier in May raised its target from $150 to $160. UBS, however, lowered its target from $180 to $175 in May, citing China export restrictions. Wedbush reiterated an "Outperform" rating on May 22. Overall, out of 37-44 analysts covering the stock, a strong majority rate it as a "Strong Buy" or "Buy", with a mean target price around $166-$175.

Noteworthy Historical Post-Earnings Stock Behavior: NVIDIA has a strong track record of beating revenue expectations (average of 5.4% since 2017) and has only missed on both reported revenue and forward guidance twice in that period. The stock has also frequently beaten gross margin estimates. However, post-earnings price action has been volatile and sometimes disappointing despite beats, due to extremely high expectations. For example, after the Q4 FY25 earnings on February 26, 2025, the stock fell 8.5% despite beating estimates, as the margin of the beat was the lowest in two years. The options market implies a +/- 7.2% to 8% move for this earnings announcement. Historically, NVDA has recorded an average absolute move of 8.5% on earnings in the past 8 quarters.

NVIDIA's upcoming earnings report carries significant weight, not just for the company itself but for the entire AI ecosystem and broader market sentiment. The company's consistent outperformance has conditioned investors to expect stellar results and robust guidance. The key will be whether NVIDIA can once again deliver a "beat and raise" substantial enough to satisfy these elevated expectations. The narrative around the ramp-up of the Blackwell platform (GB200/300) and sustained demand from hyperscalers and enterprise AI will be critical. Any perceived slowdown in Data Center growth, significant margin compression beyond expectations, or cautious guidance, particularly concerning the impact of China export restrictions or the transition to new product cycles, could trigger a negative stock reaction, similar to what was observed last quarter. Conversely, a strong reaffirmation of growth, coupled with evidence of successful Blackwell adoption and margin resilience, could reignite bullish momentum. The options market is pricing in a significant move, reflecting the high stakes involved. This report is widely seen as a crucial checkpoint for the AI investment theme.

Salesforce Inc. (CRM) - Reporting Wednesday, May 28, After Market Close (AMC)

The Street's Expectations: For Q1 FY26, Salesforce has guided for revenue between $9.71 billion and $9.76 billion, representing about 6.6-6.76% year-over-year growth. Consensus revenue estimates align with this at $9.74-$9.75 billion. Non-GAAP EPS guidance is $2.53-$2.55. Analyst consensus for non-GAAP EPS is around $2.54, though Moomoo cites a lower $1.53, and Nasdaq a $1.87. The $2.54 figure suggests a modest YoY increase of about 4.1%.

Key Narratives & Analyst Focus Areas: A primary focus will be whether AI-driven segments, such as Data Cloud & AI (which grew 120% YoY in FY25) and products like Agentforce (3,000 paying customers in 90 days), can offset slowing growth in traditional sales and re-accelerate overall revenue. Lingering foreign exchange headwinds, which had a $300 million impact in Q4 FY25, will be watched. Margin expansion is another key area, with Q4 non-GAAP operating margin hitting 33.1% due to cost cuts; the sustainability of this discipline is crucial. Remaining Performance Obligation (RPO), which surpassed $60 billion ($63.4B, up 11% YoY in Q4 FY25), will be monitored for future revenue visibility. The competitive landscape with Microsoft and Oracle, especially in AI-CRM, is also a factor. Crucially, guidance for Q2 FY26 and the full fiscal year will be intensely scrutinized, as previous guidance disappointed investors.

Recent Analyst Actions & Price Target Shifts: Salesforce carries a Zacks Rank #3 (Hold) but with a positive Earnings ESP of +0.76%, suggesting a potential earnings beat. Analyst ratings are generally "Buy" or "Strong Buy". Average price targets vary: Moomoo cites $362.42, Nasdaq $361.86, and DirectorsTalk Interviews $364.42. Public.com shows a lower $259.40, which seems an outlier given current trading levels. The stock has underperformed the S&P 500 and software peers recently.

Noteworthy Historical Post-Earnings Stock Behavior: Salesforce beat EPS estimates in three of the trailing four quarters. However, the stock fell 3.12% after the Q4 FY25 earnings report on February 26, 2025, primarily due to disappointing forward guidance. Historical annual returns for CRM have shown considerable volatility.

Salesforce finds itself at a critical juncture. The company is heavily promoting its AI capabilities, particularly its Data Cloud and Agentforce products, as the next engines of growth. However, its overall revenue growth has decelerated significantly from the historical average of 17% to a guided 6.6-6.76% for Q1 FY26.22 This slowdown has led to investor skepticism and a valuation discount compared to some peers like SAP. The market is questioning whether Salesforce's AI initiatives are truly revenue-generating differentiators or merely "table stakes" in a competitive landscape that includes heavyweights like Microsoft and Oracle. Consequently, this earnings report is viewed as a "pivotal moment". A strong performance in AI-driven revenue, coupled with sustained margin discipline, could help narrow the valuation gap. Conversely, a miss or continued cautious outlook would likely reinforce existing concerns.

Given the stock's sharp negative reaction to the previous quarter's guidance, the outlook provided for Q2 and the remainder of FY26 will likely be the most significant driver of the post-earnings stock movement, potentially overshadowing the Q1 results themselves. Analysts have explicitly stated that the "updated outlook for future quarters will be crucial for market reaction". Even if Q1 results meet or modestly beat expectations, a conservative or underwhelming guidance could lead to further pressure on the stock. Traders will be laser-focused on management's tone and any signals of improvement or continued caution in their forward-looking statements.

Dick's Sporting Goods Inc. (DKS) - Reporting Wednesday, May 28, Before Market Open (BMO)

The Street's Expectations: For Q1 2025, Dick's Sporting Goods is expected to report an EPS of around $3.37, according to Zacks Consensus and preliminary company figures for adjusted EPS. The company's preliminary GAAP EPS was $3.24. Nasdaq also cites a $3.24 consensus. This represents a slight dip from the year-ago reported number if considering the $3.24 figure. Revenue is anticipated to be $3.12 billion, up 3.4% year-over-year.

Key Narratives & Analyst Focus Areas: A key highlight is the preliminary Q1 comparable store sales growth of 4.5%, which surpassed some analyst models. Investors will look for details on the drivers behind these strong comps, including transaction growth and performance of strategic initiatives like digital transformation (GameChanger, Dick's Media Network) and omnichannel experiences. The most significant development is the recently announced (May 15) proposed acquisition of Foot Locker. The strategic rationale, integration plans, and financial implications of this transformative deal will be a central topic. Management's commentary on the macroeconomic landscape, consumer spending trends, and efforts to manage higher costs, particularly the expected SG&A deleverage in the first half of fiscal 2025, will also be crucial.

Recent Analyst Actions & Price Target Shifts: Zacks assigns DKS a Rank #3 (Hold) but with a positive Earnings ESP of +2.57%, predicting an earnings beat. MarketBeat reports a consensus "Hold" rating with an average price target of $229.47. Citigroup reaffirmed a "neutral" rating and set a $220 price target (down from $230) on March 12.

Noteworthy Historical Post-Earnings Stock Behavior: Dick's has a strong record of beating earnings expectations, with an average surprise of 8.6% over the trailing four quarters and surpassing consensus EPS estimates in all four of those quarters. Historically, the stock has seen positive one-day returns about 65% of the time over the last 20 earnings reports in five years, with a median positive return of 10% and a median negative return of -4.9%.

The announcement on May 15, 2025, of Dick's Sporting Goods' definitive agreement to acquire Foot Locker for an enterprise value of approximately $2.5 billion has fundamentally shifted the narrative surrounding the company. This earnings call will be the first major platform for management to articulate the strategic vision behind this transformative move to the broader investment community. Questions regarding the integration of Foot Locker, potential synergies, competitive positioning in the athletic footwear and apparel market, and the overall financial impact will undoubtedly dominate the discussion. The strong preliminary Q1 results, particularly the 4.5% comparable sales growth, provide a positive backdrop, suggesting underlying strength in Dick's core business.

However, this operational strength must be viewed alongside management's previous cautions about the "volatile macroeconomic landscape and higher costs," specifically anticipating "greater deleverage in adjusted selling, general and administrative (SG&A) expenses in the first half of fiscal 2025". Investors will be keen to understand if the robust sales momentum can be sustained if consumer discretionary spending faces headwinds, and how the company plans to manage costs and protect margins, especially now with a major acquisition in progress. The release of U.S. CB Consumer Confidence on May 27 and Personal Spending data on May 30 will provide timely context for these concerns.

Abercrombie & Fitch Company (ANF) - Reporting Wednesday, May 28, Before Market Open (BMO)

The Street's Expectations: For its fiscal first quarter (ending April 2025), analysts project Abercrombie & Fitch to report an EPS of around $1.34 to $1.36. This would mark a significant year-over-year decline of approximately 37% from the $2.14 EPS reported in the same quarter last year. Revenue is expected to be around $1.06 billion, representing a 4% increase year-over-year from $1.02 billion. (Note: Some sources report past actuals for a "Q1 2025" that likely refers to the quarter ending January 2025, showing a beat with $1.58B revenue and $3.57 EPS; the upcoming report is for the quarter ending April 2025.)

Key Narratives & Analyst Focus Areas: After a stellar fiscal 2024, which saw 16% year-over-year sales growth and a decade-high operating margin of 15% , the key narrative is growth moderation. For fiscal 2025, net sales growth is projected to slow to 3-5%. Operating margins are also anticipated to see a slight decline to 14-15% for the full year, partly due to uncertainty related to trade tariffs. The Q1 operating margin is expected to dip more significantly to 8-9%. The performance of both the Abercrombie and Hollister brands will be under scrutiny, with Hollister having shown strong 24% comparable sales growth in late 2024. The impact of trade tariffs is a recurring concern, alongside higher freight costs and inventory clearance needs which are cited as margin pressures.

Recent Analyst Actions & Price Target Shifts: MarketBeat reports a consensus "Moderate Buy" rating with an average price target of $115.50. Recent analyst actions include UBS maintaining a "Buy" and raising its price target to $130 (May 19), while Jefferies lowered its target to $135 but retained a "Buy" (May). Morgan Stanley maintained "Equal-Weight" but lowered its target to $78 (May 6). Barclays initiated coverage with an "Equal-Weight" rating and a $71 target (April 21).

Noteworthy Historical Post-Earnings Stock Behavior: Historically, ANF stock has declined following earnings announcements about 60% of the time, with a median one-day drop of 1.9% over the last five years. This rate improves to a 50% chance of a positive one-day return when considering only the last three years. The stock has exhibited significant volatility in its annual returns. A recent report (potentially referring to the quarter ending Jan 2025) indicated a sharp pre-market drop of 14.39% despite an earnings beat, highlighting market sensitivity.

Abercrombie & Fitch is navigating a period of recalibrated expectations after a banner fiscal 2024. The company achieved record sales and its highest operating margin in over a decade, setting a high bar for future performance. Now, with management guiding for moderated growth (3-5% sales increase for FY25) and potentially slightly compressed operating margins (14-15% for FY25, with Q1 expected at 8-9%), the market appears to be highly sensitive to any signs of deceleration. The reported sharp negative stock reaction to a recent earnings beat underscores this skittishness. Investors seem to be looking past current performance to potential future headwinds, making the upcoming Q1 results (for the quarter ending April 2025), which are expected to show a year-over-year EPS decline, a crucial test.

The company's explicit mention of "uncertainty related to trade tariffs" as a factor influencing its outlook positions ANF as a bellwether for how apparel retailers are coping with global sourcing challenges and potential cost pressures. Commentary on the specific impacts of tariffs on sourcing, pricing, and margins will be closely watched by traders looking for broader retail sector implications. The automotive sector is also grappling with tariff issues, and general market sentiment has been influenced by tariff concerns, making ANF's insights particularly timely.

Costco Wholesale Corporation (COST) - Reporting Thursday, May 29, After Market Close (AMC)

The Street's Expectations: For its fiscal third quarter, Costco is expected to report an EPS of approximately $4.25, up about 12.4% year-over-year from $3.78. Moomoo's consensus is slightly lower at $4.233. Revenue is projected to be around $63.1 billion. For context, Costco's net sales for April 2025 were $21.18 billion, a 7.0% increase year-over-year.

Key Narratives & Analyst Focus Areas: Membership trends are paramount, including renewal rates (which stood at 92.9% for the U.S./Canada and 90.5% worldwide at the end of Q2 FY25) and new member acquisition. Membership fee income was $1.193 billion in Q2 FY25. Comparable store sales will be a key metric; total company comps were up 4.4% in April. The performance of Costco's e-commerce business, which saw a 12.6% comparable sales increase in April and a 22.2% adjusted increase in Q2 FY25, will be closely watched for continued momentum. How the company is managing inflation, its pricing strategies, and shifts in consumer behavior among budget-conscious shoppers are also important. Gross margins and overall operational efficiency in maintaining its value proposition will be scrutinized. Given the stock's recent surge past the $1,000 per share mark and its high P/E ratio (around 60 trailing), discussions around valuation sustainability and even the potential for a stock split are likely.

Recent Analyst Actions & Price Target Shifts: Costco generally holds a "Moderate Buy" consensus rating among analysts, with Zacks' Average Brokerage Recommendation (ABR) at 1.88 (leaning towards Buy). Recent price target adjustments include JPMorgan raising its target to $1,070 (March 7) and Loop Capital cutting its target to $1,045 (April 9). Cfra Research upgraded the stock from "Hold" to "Moderate Buy" on April 4. Average price targets hover in the $1,024 to $1,065 range.

Noteworthy Historical Post-Earnings Stock Behavior: Costco has a mixed history of earnings surprises, having beaten consensus EPS estimates in two of the past three quarters 52 but missing revenue estimates in half of the last four reports. Following its Q2 2025 results on March 6, shares fell 6.1%. The options market is currently implying a relatively modest +/- 5% move for the upcoming earnings announcement.

Costco's stock crossing the $1,000 threshold is a significant milestone that brings its valuation into sharp relief. With a trailing P/E ratio around 60, well above its pre-pandemic levels and many retail peers, the upcoming earnings report will be a crucial test of whether its consistent growth and robust membership model can continue to justify this premium. While Costco's fundamentals, including strong membership loyalty and consistent sales growth (Q2 FY25 net sales +9.1% YoY), are compelling, its revenue growth did slow in fiscal 2024. Investors will be closely examining the Q3 results and the outlook for the remainder of fiscal 2025 for any signs of further deceleration or margin pressure that could make the stock vulnerable, despite its defensive characteristics. The relatively low implied volatility of +/-5% priced in by the options market suggests that major surprises are not anticipated, but a miss on key metrics could still trigger a notable repricing given the elevated valuation.

The continued strength of Costco's e-commerce channel is another vital aspect for sustaining growth momentum. The reported 12.6% e-commerce comparable sales increase in April and the 22.2% adjusted increase in Q2 FY25 are positive signs. Maintaining double-digit growth in this area is important for Costco to demonstrate its ability to adapt to evolving consumer shopping preferences and compete effectively with online retail giants, thereby complementing its formidable warehouse club business.

Dell Technologies Inc. (DELL) - Reporting Thursday, May 29, After Market Close (AMC)

The Street's Expectations: For Q1 FY26, Dell's EPS estimates show some variation: Zacks has a consensus of $1.50, Nasdaq cites $1.47 to $1.48, while Futurum Group points to company guidance for non-GAAP EPS at $1.65 (+25% YoY). Zacks also notes a higher $1.71 consensus (+34.7% YoY). Revenue is guided by the company to be between $22.5 billion and $23.5 billion (up 3% YoY at the midpoint), with Zacks analysts expecting around $23.1 billion (+3.9% YoY). Morgan Stanley anticipates $2.3 billion in AI server revenue for the April quarter alone.

Key Narratives & Analyst Focus Areas: The dominant narrative is the strong demand for Dell's AI servers, which is the primary growth catalyst. The Infrastructure Solutions Group (ISG) saw a significant surge in Q4 FY25, driven by record AI server demand and robust enterprise adoption. Dell projects AI server shipments to exceed $15 billion in FY26. Analysts expect ISG net revenue of $10.38 billion for Q1 (+12.5% YoY). The Client Solutions Group (CSG), which includes PCs, showed modest growth in Q4 (+1% YoY) with commercial client sales up but consumer revenue declining. The PC refresh cycle remains sluggish, with hopes pinned on AI-enabled PCs and the end-of-life for Windows 10 support to stimulate demand. Analysts project Q1 CSG net revenue of $12.24 billion (+2.3% YoY). Operating margins will be watched, considering pricing pressures in CSG and ongoing investments in AI. Morgan Stanley believes full-year guidance will likely remain unchanged despite a potential Q1 beat, citing the balance between strong AI demand and uncertainties in traditional hardware and tariffs.

Recent Analyst Actions & Price Target Shifts: Dell has a "Moderate Buy" consensus rating from analysts, with an average price target around $134.65. Morgan Stanley maintained a "Buy" rating and raised its price target from $89 to $126 on May 21. Citigroup also holds a "Buy" rating and increased its target to $128 on May 16. Raymond James has an "Outperform" rating and lifted its target to $144 on May 13. Consensus EPS estimates for the April 2025 quarter have seen upward revisions recently.

Noteworthy Historical Post-Earnings Stock Behavior: Dell has a strong track record of beating Wall Street EPS estimates, having done so in each of the last four quarters. However, shares fell 6.8% after the Q4 earnings announcement on February 27, primarily because revenue missed estimates due to a decline in services revenue. Historically, the stock has moved higher immediately after earnings in 6 out of the last 12 reports, with an average one-day gain of 2.0%. However, over the same 12 reports, it's more likely to trade lower one day after earnings, with an average loss of 1.9%.

Dell Technologies' growth trajectory is currently heavily reliant on the booming AI server market to counterbalance the persistent sluggishness in its traditional PC business (Client Solutions Group). The Infrastructure Solutions Group (ISG), powered by record demand for AI servers (servers and networking revenue up 37% YoY in Q4 FY25), is the clear bright spot. Dell's projection of over $15 billion in AI server shipments for fiscal 2026 underscores this momentum. In contrast, the CSG segment continues to face challenges, with consumer PC demand remaining weak and the broader enterprise PC refresh cycle yet to gain significant traction. Investors will be keenly focused on continued strength in AI server orders and backlog, alongside any commentary from management that might signal an impending acceleration in the PC refresh cycle, potentially driven by the advent of AI-PCs and the approaching end-of-life for Windows 10. NVIDIA's earnings report, scheduled for the day before Dell's, will provide a crucial leading indicator for overall AI infrastructure demand.

Beyond product segment performance, potential tariff impacts and supply chain management are emerging as important considerations. Morgan Stanley highlighted "tariffs uncertainty" as a factor for Dell. Given Dell's extensive global supply chain for hardware components, any new tariffs, particularly those affecting imports from China or key manufacturing hubs, could impact input costs and margins. Furthermore, ensuring a stable supply of high-demand AI components, such as NVIDIA GPUs, is critical to meeting the robust AI server demand. Morgan Stanley noted that Dell's growth in AI server revenue for the July quarter will largely depend on its ability to manage this supply.68 Traders will therefore be attentive to any remarks from Dell regarding its strategies for mitigating tariff risks and navigating supply chain complexities.

The Macro View: Economic Indicators to Watch

The holiday-shortened trading week will be punctuated by several key economic data releases that could sway market sentiment and influence trading across asset classes.

A. U.S. Market Holiday:

○ Event: Memorial Day.

○ Date: Monday, May 26, 2025.

B. Key U.S. Data Points & Potential Impact:

Tuesday, May 27: The week kicks off with April Durable Goods Orders (12:30 PM ET), providing a look at big-ticket manufacturing demand. More critically, May's CB Consumer Confidence index (2:00 PM ET), with a previous reading of 86.0 and a forecast of 88.0, will offer vital clues about consumer sentiment and its potential impact on future spending, directly relevant to the retail earnings reports due later in the week.

Wednesday, May 28: The release of the FOMC Minutes from the May 6-7 meeting (2:00 PM ET) will be closely parsed by traders. These minutes provide a detailed account of the Federal Reserve's discussions on inflation, the economic outlook, and the potential path of interest rates. Recent Fed communications suggest a patient stance amid rising stagflationary risks and the uncertain impact of tariff policies.

Thursday, May 29: A busy day for data starts with the Q1 GDP (Second Estimate) at 12:30 PM ET. The advance estimate indicated a contraction of 0.3% annualized, and the consensus for the second estimate remains at -0.3%. Simultaneously, Initial Jobless Claims for the week ending May 24 will be released, with the previous week's figure at 227,000. This will be followed by April's Pending Home Sales data at 10:00 AM ET (previous: 6.1% MoM), offering a leading indicator for the housing sector. The Treasury will also conduct a 7-Year Note Auction, and the EIA Natural Gas Stocks Change (10:30 AM ET) will be relevant for energy traders.

Friday, May 30: The week culminates with the Federal Reserve's preferred inflation measure, the April PCE Price Index, at 12:30 PM ET. In March, headline PCE YoY was 2.3% and Core PCE YoY (excluding food and energy) was 2.6%. This data is critical for gauging inflationary pressures and the Fed's likely policy response. Alongside PCE, April's Personal Income (previous 0.5% MoM, forecast 0.5% MoM) and Personal Spending (previous 0.7% MoM, forecast 0.7% MoM) will provide insights into consumer financial health. Later, the May Chicago PMI (1:45 PM ET, previous 44.6) and the final University of Michigan Consumer Sentiment for May (10:00 AM ET), with a preliminary reading of a concerningly low 50.8, will round out the week's key U.S. releases.

C. Global Economic Pulse:

Germany: The preliminary Consumer Price Index (CPI) for May is due on May 30. The final April CPI showed a year-over-year inflation rate of +2.1%, indicating an easing trend. This figure is significant for Europe's largest economy and influences ECB policy expectations.

Eurozone: While the flash estimate for May CPI is scheduled for June 3, the final April CPI data (2.2% YoY headline, 2.69% YoY core) will provide context for inflationary trends in the bloc.

China: The National Bureau of Statistics (NBS) Manufacturing and Non-Manufacturing PMIs for May are set for release on May 31. April's Manufacturing PMI was contractionary at 49.0 (May forecast 48.6), while the Non-Manufacturing PMI was 50.4 (May forecast 50.4). These are vital indicators of the health of the world's second-largest economy and have implications for global growth.

The advance estimate for U.S. Q1 GDP showed an unexpected contraction of 0.3%, while PCE inflation, though showing signs of easing on a year-over-year basis, remained above the Federal Reserve's target with notable quarterly increases. The FOMC Minutes from the May 6-7 meeting, due this week, will be crucial in revealing the extent of the Fed's discussions around these conflicting signals, especially as the central bank remains wary of potential price spikes induced by tariffs. If the second estimate of Q1 GDP confirms or deepens the contraction, and if the April PCE data released on Friday shows persistent monthly price pressures, concerns about stagflation could intensify. This would complicate the Fed's policy path and potentially heighten market uncertainty.

A significant wildcard for both retail sector performance and the Fed's economic assessment is consumer sentiment. The preliminary May University of Michigan Consumer Sentiment index plummeted to 50.8, a near record low, largely attributed to fears about tariffs and inflation. This starkly contrasts with some recent retail sales figures that had shown resilience. The final May UMich reading on Friday, along with Tuesday's CB Consumer Confidence report, will be critical. A confirmation of sharply deteriorating consumer mood could signal impending weakness in discretionary spending, directly impacting retailers like Dick's Sporting Goods, Abercrombie & Fitch, and even the non-essential categories at Costco. Such pessimism, if it translates into significantly reduced spending, might also become a more prominent factor in the Fed's risk assessment, potentially counterbalancing some inflation concerns.

While U.S. data will be the primary focus, key international indicators will provide important context for global risk sentiment. China's NBS Manufacturing PMI for April was in contractionary territory at 49.0, with a similarly weak forecast for May at 48.6. The Non-Manufacturing PMI was only marginally expansionary. Continued weakness in China's PMI data could signal slowing global demand, potentially affecting U.S. multinational corporations with significant international sales or complex global supply chains, such as NVIDIA, Dell, Abercrombie & Fitch, and Costco. Concurrently, inflation data from Germany and the broader Eurozone will influence European Central Bank policy, which can create ripple effects in global markets and currency exchange rates, thereby impacting U.S. companies.

Sector Snapshot: Brief Insights for Context

Technology: The sector remains heavily influenced by the AI narrative, with NVIDIA's earnings viewed as a critical bellwether for overall AI sentiment and investment trends. This robust demand for AI capabilities is directly benefiting companies like Dell through strong sales of AI servers. However, the traditional PC market is still awaiting a significant refresh cycle, with AI-enabled PCs anticipated as a future catalyst for demand. Beyond AI, the industry continues to grapple with the need for increasingly sophisticated semiconductor technology and the complexities of managing global semiconductor supply chains. Cybersecurity also remains a growing concern, particularly with the proliferation of connected technologies.

Retail (General & Apparel): The retail landscape is characterized by budget-conscious consumers navigating inflationary pressures and higher interest rates, making value proposition a key differentiator. This environment tends to favor business models like Costco's, which emphasize value. Post-pandemic, brand loyalty has shown signs of erosion, compelling retailers to focus more on customer retention strategies, a relevant point for apparel companies like Abercrombie & Fitch. A significant headwind, particularly for the apparel sector, is the uncertainty surrounding trade tariffs. For sporting goods retailers such as Dick's, digital transformation and a seamless omnichannel experience are crucial for maintaining competitiveness.

Automotive Retail: The automotive sector is contending with a new and evolving tariff landscape, including potential duties on imports from key regions like Mexico, Canada, and China, which poses a major challenge. This backdrop is relevant for auto parts retailers like AutoZone, as demand for parts can be influenced by dynamics in both new and used car markets, which are themselves affected by tariffs. Strong performance in both DIY and commercial (DIFM) segments is anticipated for auto parts retailers. The booming used car market can also drive demand for aftermarket parts and services.

The pervasive influence of artificial intelligence extends beyond the tech sector. While NVIDIA and Dell are direct beneficiaries of AI hardware demand, AI is also a core theme for software companies like Salesforce, which is embedding AI across its CRM offerings (e.g., Einstein GPT, Agentforce). Furthermore, retailers are increasingly leveraging AI for operational efficiencies and to enhance customer experiences, as seen in Dick's Sporting Goods' digital transformation initiatives, including GameChanger and the Dick's Media Network. This underscores AI as a broad, secular trend that traders should monitor for commentary even from non-traditional tech companies, as it can be a significant differentiator or growth driver.

A common thread across multiple sectors is the pressure on consumers. Budget-conscious behavior, driven by inflation and higher interest rates, is impacting discretionary spending, which is particularly relevant for apparel retailers like Abercrombie & Fitch and sporting goods retailers like Dick's Sporting Goods. Costco's value-driven model is well-positioned in such an environment. For AutoZone, economic pressures present a mixed scenario: consumers might delay new car purchases, potentially boosting demand for parts to maintain older vehicles, but they might also defer non-essential maintenance. The upcoming PCE inflation data and consumer sentiment figures will be critical in assessing the extent of this consumer squeeze and its potential ramifications across these sectors.

Lightspeed's Closing Take: Navigating the Week Ahead

The upcoming holiday-shortened week is laden with critical catalysts that promise to shape market direction. The earnings release from NVIDIA will be a focal point for AI sentiment, while reports from key retailers like Costco, Dick's Sporting Goods, and Abercrombie & Fitch will offer vital insights into consumer health. Macroeconomically, the PCE inflation data stands out as the Federal Reserve's preferred gauge, carrying significant implications for monetary policy expectations, complemented by the FOMC minutes and consumer sentiment readings. This concentration of impactful events in just four trading days is likely to fuel heightened market volatility.

For active traders, agility and preparedness will be paramount. Closely monitoring key technical support and resistance levels for individual stocks and major indices will be essential. Furthermore, paying keen attention to the forward-looking guidance provided by reporting companies can often be more influential than the historical results themselves. It is crucial to understand how the unfolding macroeconomic data—particularly on inflation and consumer confidence—might interact with and reframe company-specific news.

This week underscores the dynamic interplay between corporate performance and the broader economic environment. The real edge for traders will come not just from reacting to isolated earnings beats or misses, or singular economic data points, but from synthesizing these diverse information streams. For instance, a strong earnings report from a consumer-dependent company might be viewed differently if consumer confidence data released contemporaneously signals deep pessimism about the future. Conversely, favorable inflation data could provide a tailwind for growth-oriented stocks, even if their guidance is merely in line with expectations. Lightspeed Financial Services Group is committed to providing the platforms, tools, and insights that active traders require to navigate such complex market conditions effectively. Equip yourself with Lightspeed's advanced trading technology and real-time market analysis to turn this week's catalysts into your trading edge.