MARKET COMMENTARY
US equities extended their winning streak to seven consecutive weeks, though the S&P 500 and Nasdaq both set multiple intraweek records before retreating sharply on Friday and only narrowly closing the week in the green. Apple crossed $300 for the first time, ending Thursday at $300.23 and adding to the headline momentum. Earnings season has been broadly strong, with blended Q1 growth running near 28% and roughly 84% of companies beating estimates, well above 5- and 10-year averages. Beneath the surface, however, the rally remains unusually narrow, only about 23% of S&P 500 names are outpacing the index itself, and four of the five record closes last week came on days of negative market breadth, a divergence worth monitoring.
The Iran ceasefire is under severe strain. President Trump publicly rejected Tehran's latest proposal as "totally unacceptable," and the two sides remain far apart: the US is demanding verifiable nuclear disarmament and cessation of proxy activity, while Iran is insisting on Strait of Hormuz sovereignty recognition and the lifting of sanctions. Tensions escalated sharply on May 17 when a drone struck the Barakah Nuclear Power Plant in Abu Dhabi, two were intercepted, one hit an external generator, with no radiation risk reported, but the attack marked a significant escalation. A Netanyahu-Trump call over the weekend reportedly included discussion of direct strike options that could come within days, and Iran has separately begun implementing a maritime toll system on commercial vessels transiting the Strait, a move that introduces a new pressure point on global energy flows.
Nvidia reports Wednesday, and the print carries the weight of the entire AI trade. Consensus is clustered around $78.5 to $79 billion in revenue and roughly $1.77 in EPS, against a Q4 FY2026 baseline of $68.1 billion that was already up 73% year-over-year. The stock has rallied roughly 15% over the past month to approximately $225 to $236, pushing its market cap to around $5.5 trillion, and that run compresses the margin for upside surprise. Investors will focus on data center revenue growth, gross margin trajectory, and the shape of Q2 guidance, any softness on those three metrics will be difficult to offset with headline beats alone.
The long end of the Treasury market is sending a clear signal, and equity investors are beginning to listen. The 10-year yield sits around 4.6%, while the 30-year crossed 5% for the first time since 2007, with the May 13 auction clearing at 5.046% on a weak 2.30 bid-to-cover ratio. Three forces are driving yields higher in tandem: war-driven inflation with headline CPI at 3.8%, a debt-supply feedback loop as deficits expand, and uncertainty around the Fed's direction under newly confirmed Chair Kevin Warsh, who took the helm on May 15. Brent crude at roughly $110, down from a peak near $120 in April but still about $45 above year-ago levels, is adding to the inflation picture, the 30-year mortgage rate sits at 6.36%, and rising discount rates are beginning to press on equity valuations in a market where multiples had already expanded considerably.
Economic Releases This Week
Monday: Home Builder Confidence
Tuesday: None
Wednesday: None
Thursday: Initial Jobless Claims, Housing Starts, Building Permits, S&P Flash U.S. Services and Manufacturing PMI
Friday: Consumer Sentiment
Stories to Start the Week
China says it has agreed with U.S. to set up trade and investment bodies
The economy Kevin Warsh is inheriting is not the one he wanted
U.S. creates $1.7B ‘lawfare’ fund in exchange for Trump dropping $10B IRS suit
Anthropic’s $1.5B copyright settlement is getting messy as judge delays approval
PGA Championship: Aaron Rai pulls off massive shocker to claim first major victory
Our Newton model attempts to determine the highest probability of future price direction by using advanced algorithmic and high-order mathematical techniques onthe current market environment to identify trends in underlying security prices. The Newton model scores securities over multiple time periods on a scale of 0-20 with 0 being the worst and 20 being the best possible score.
Trend & level both matter. For example, a name that moves from an 18 to a 16 would signal a strong level yet slight exhaustion in the trend.
Disclousure:
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