Stocks climbed to record highs last week ahead of a hotter-than-expected April CPI report, and concerns about a hawkish Federal Reserve sent Treasury yields sharply higher, leading to a Friday sell-off amid geopolitical pressures.

 

Markets were disappointed by stalled progress from President Trump and China’s President Xi's meetings on trade and regional security, while the Iran conflict kept oil prices elevated and pushed risk premiums higher across global bonds.

 

Here's what drove last week’s results, and what to watch this week.

 

 

Stock Index Performance 

• The S&P 500 rose 0.13%.
• The Nasdaq 100 fell 0.38%.
• The Dow Jones Industrial Average fell 0.17%.

 

 

Macro Forces in Play

Inflation Is Back and Broadening. April CPI came in at 3.8% year-over-year, the highest in nearly three years, with core CPI still running above the Fed's 2% target. The Iran conflict and disruptions in the Strait of Hormuz drove gasoline prices above $4.50 nationally, and the more troubling signal is that inflation is now spreading across food, shelter, and energy. Real wages have turned negative, meaning most Americans are losing purchasing power.

 

The Fed Has a New Chair. Kevin Warsh's confirmation as Fed chair leaves markets guessing how new leadership will respond to persistent price pressures. Moving forward, eyes will be set on June’s Fed meeting, the first Warsh will lead. Now, it’s worth remembering that while the Fed Chair sets the overall agenda, the Federal Open Market Committee works as a group to decide policy at each meeting. Currently, markets are pricing in no cut for the June meeting.

 

Geopolitics Rattles Markets. The two major geopolitical stories ended the week unresolved. Oil stayed firmly above $100 all week as the Iran conflict continued choking supply through the Strait of Hormuz, feeding directly into broader inflation. Trump's summit with Xi produced positive rhetoric but no concrete agreements on trade or the energy crisis.

 

 

The Week Ahead 

Investors will focus on how inflation and the energy shock filter through to corporate earnings and global growth. Key activity readings from major economies arrive against a backdrop of still-elevated oil prices. Any signs that energy costs are denting demand, compressing margins, or undermining business confidence would put the rally at risk.

 

Finally, Nvidia reports first-quarter results on Wednesday, May 20. As the world's most valuable company and the clearest window into AI spending across chips, data centers, and energy infrastructure, its performance carries implications well beyond the stock itself.

 

As always, we are watching the market and are here to help keep you informed about the current financial climate. If you have any questions about your portfolio, don’t hesitate to reach out.