Today’s most important news: Nvidia’s profits, inflation, oil, and Microsoft’s bet on Bill Ackman

TLDR

• Nvidia reports earnings next week, with expectations high about demand for AI chips
• Bond yields are rising on concerns that inflation will remain high for longer, putting pressure on growth stocks
• Oil prices are rising due to uncertainty in the Middle East, which increases concerns about inflation
• Major retailers, including Walmart, Home Depot and Target, will report next week, providing a read on consumer…
• Bill Ackman’s Pershing Square has built a new core position at Microsoft, citing compelling valuation.

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Investors are heading into a critical week with a lot to address. Artificial intelligence, inflation, energy prices, retail profits, and a big Wall Street bet are all converging simultaneously. Here’s what you need to know.

Nvidia: The biggest test of AI commerce

The most watched event next week is Nvidia Earnings report. The chip maker has become one of the hottest stocks in the S&P 500, driven by massive demand for data center chips used to build and operate artificial intelligence systems.

Expectations are high. The stock was one of the strongest performing stocks in the market over the past year. This means that the level of positive reaction is high.

If Nvidia delivers strong numbers and raises its guidance, it could give new impetus to the broader AI trade. If the results are disappointing, the fallout could spread across chip stocks, big tech companies and AI infrastructure names.

The report will be read closely as a reality check on whether companies are spending on it Artificial intelligence infrastructure Still accelerating.

Inflation and rising yields are putting pressure on markets

Beyond Nvidia, inflation is once again a concern on the front lines. US Treasury bond yields Interest rates moved toward their highest levels in nearly a year, as investors reset their expectations for rate cuts.

Higher yields are a headwind for growth stocks. When bond yields rise, investors are less willing to pay high valuations for companies that are expected to be profitable years later. This hits AI, technology and software stocks directly.

Oil prices increased concern. Brent crude rose as uncertainty in the Middle East continued to strain energy markets. High oil prices could fuel broader inflation, raise business costs, and erode consumers’ purchasing power.

Rising yields and rising oil prices together create a difficult backdrop for the kind of high-growth, high-value stocks that have led the market higher.

Retailers will experience the consumer story

The other major event next week is a wave of retail earnings. Walmart, Home Depot, Target and TJX are all scheduled to report.

Walmart is the most closely watched. As a seller of groceries, household goods, and daily necessities, it’s a straightforward read for the low- and middle-income American consumer.

Home Depot will reflect conditions in the housing and home improvement market. Target and TJX will show whether shoppers are still spending on apparel and discretionary goods when budgets are under pressure.

Together, these results will show whether the American consumer is holding up or starting to decline.

Ackman bets on Microsoft

Hedge fund manager Bill Ackman revealed that his company, Pershing Square, is building a site in… Microsoft Since February. He described the evaluation as convincing.

Ackman is one of the most followed investors on Wall Street, so this revelation caught attention. Microsoft stock is closely tied to the AI ​​and cloud computing story through its Azure platform, Microsoft 365 Copilot tools, and its partnership with OpenAI.

The move appears to coincide with Akman’s exit from Alphabet, creating a direct contrast between two different AI strategies. Microsoft focuses on enterprise software and the cloud. Alphabet is built around search, advertising, and AI infrastructure.

The selection of Ackman indicates confidence in Microsoft’s ability to turn investment in artificial intelligence into revenue in the near term through its software products.

What comes next?

The next few days will do a lot to shape market sentiment. Nvidia’s report will confirm or challenge the rise of artificial intelligence. Retail earnings will give a current snapshot of consumer health. Data on inflation, energy prices and bond yields will continue to set the tone for valuations across the board.

The market is still broadly interested in AI, but investors are becoming more selective about the companies and sectors they back.