Wall Street eyes Nvidia and retail earnings for signals on AI boom, consumer spending

New York: Two key themes shaping the US stock market — the artificial intelligence boom and inflation-pressured consumer spending — will be in focus next week, with earnings reports from semiconductor giant Nvidia and a range of major retailers led by Walmart.

Stock indices have risen strongly in recent weeks, with the benchmark S&P 500 and the technology-heavy Nasdaq Composite close to record highs. Market movements have been driven by developments in artificial intelligence and rising energy prices linked to the war in Iran, said Allen Bond, portfolio manager at Jensen Investment Management.

“There is not a lot of overlap in the two narratives, but from one day to the next, developments can really drive the market,” Bond said.

Stocks pulled back on Friday as rising crude oil prices heightened inflation concerns and pushed bond yields sharply higher.

Despite the recent pullback, the S&P 500 has climbed nearly 17 per cent since its low in late March and is up more than 8 per cent so far in 2026.

Some investors believe the market may be due for a pause following the sharp rally. Concerns have also emerged that gains have been driven by a relatively narrow group of stocks, suggesting the rally may lack broad strength. According to LSEG data, only about one-fifth of S&P 500 components had outperformed the index since the March 30 low.

“There are really a smaller set of names driving the overall index returns again,” said Patrick Ryan, chief investment strategist at Madison Investments. “It is not necessarily a healthy market when that many stocks are being left behind.”

Nvidia is due to report results on Wednesday, as a strong first quarter for US corporate earnings nears its end. Shares of Nvidia — the world’s largest company by market capitalisation — along with other semiconductor stocks, have driven recent market gains.

Nvidia shares have risen 36 per cent since the March low, while the Philadelphia SE Semiconductor Index has surged more than 60 per cent amid strong demand for chips used in data centres and AI infrastructure. Since the current bull market began in October 2022, Nvidia’s shares have risen by more than 1,800 per cent.

“What we need to see from Nvidia is evidence that justifies the increase in the stock price and its position in benefiting from increased spending on data centres,” Bond said. “The results will be closely watched as an indicator of the broader industry’s health.”

Investors are also monitoring whether competitors are beginning to erode Nvidia’s market share, said Yung-Yu Ma, chief investment strategist at PNC Financial Services Group.

“It will be important to see whether Nvidia can maintain its leadership position as effectively as it has in recent years,” Ma said.

The week will also bring insights into the retail sector. Walmart, the world’s largest retailer, is set to report results on Thursday, alongside other major companies including Home Depot, Target and TJX.

Investors are increasingly concerned that inflation linked to the conflict in Iran may begin to weigh on consumer spending, which accounts for more than two-thirds of the US economy.

Recent data showed elevated consumer and wholesale price readings, with the Producer Price Index for April recording its largest increase since March 2022. Earlier this month, the US national average price for petrol exceeded $4.50 per gallon for the first time in nearly four years.

Investors will be closely watching retailer reports for signs of changes in spending behaviour.

“At some point, these costs are going to catch up with consumers and start to moderate spending,” Ma said. “The key question is how resilient the consumer remains.”