Markets drifted higher on Friday as Wall Street coasted into the Memorial Day weekend. The Dow set a fresh record close, helped by broad sector strength and lingering optimism around AI spending. But the gains were modest. Nvidia’s blowout earnings earlier in the week failed to spark any real follow-through, and the new Fed chair took office with a long list of problems he didn’t create.
Market Snapshot
| INDEX | CLOSE | CHANGE |
|---|---|---|
| S&P 500 | 7,473.47 | +0.37% |
| Nasdaq | 26,343.97 | +0.19% |
| Dow Jones | 50,579.70 | +0.58% |
| Bitcoin | $77,293 | -0.2% |
| Ethereum | $2,116 | -0.5% |
What Moved Markets
Nvidia beat everything and the stock still fell. The company posted $81.6 billion in revenue and $1.87 in adjusted EPS, both well above consensus. None of it mattered. Shares slipped about 0.9% as investors treated the results as a “meet the already insane expectations” event rather than a reason to buy more. If you held through earnings, you watched the classic sell-the-news play unfold in real time. Hyperscalers are still planning to spend a combined $725 billion on AI this year, so the demand story is intact, but the stock price had already priced in most of it.
Kevin Warsh is officially the new Fed chair. He took the oath at the White House on Friday, replacing Jerome Powell after eight years. The timing is rough. He inherits an economy dealing with an oil shock tied to the Iran conflict, mortgage rates at nine-month highs, and inflation running at a three-year peak. Markets seemed unbothered for now, but the real test comes when Warsh has to make his first rate decision under pressure.
The Dow hit a record close, but context matters. All sectors advanced except Communications. Health Care and Tech led the way, and the broad-based strength looked healthy on the surface. Still, this is a market grinding higher on thin pre-holiday volume, not one surging with conviction. The S&P 500 and Nasdaq both posted gains, but neither broke new ground.
Worth Watching
Thursday’s GDP and PCE combo. The second estimate for Q1 GDP drops alongside April PCE prices (the Fed’s preferred inflation gauge). This is the first major data release on Warsh’s watch, and it will set the tone for how markets think about rate policy going forward.
Costco and Dell earnings on Thursday. Both are bellwethers: Costco for the consumer, Dell for enterprise AI spending. Sour commentary from either one could shift sentiment quickly.
Consumer confidence on Tuesday. With gas prices elevated and the geopolitical backdrop still messy, this reading will tell us whether households are starting to feel the squeeze.
Bottom Line
The market is in a strange spot. Record highs on the Dow, steady gains across the board, and yet the underlying risks keep stacking up: a new and untested Fed chair, an oil shock that is not going away, and inflation that is heading the wrong direction. If you are holding positions, the price action says stay the course for now. But this week’s economic data, especially Thursday’s GDP and PCE numbers, could be the thing that either validates the rally or pulls the rug. Pay attention to the data, not the headlines.
