📊 Market Overview
The S&P 500 rose 1.1%, the Dow climbed 1.3%, and the Nasdaq added 1.5% on Wednesday. The biggest driver was a dip in the 10-year Treasury bond yield to 4.57% combined with President Trump’s announcement of progress on talks with Iran. Today, watch the preliminary May PMI readings (Purchasing Managers’ Index — a survey that measures whether factories and service companies are growing or shrinking).
📊 Market Snapshot
Nvidia’s blowout earnings proved AI spending is real, but the stock still slipped after hours — a reminder that when expectations are sky-high, even great results may not be enough.
📈 The Big Picture
Two forces are pulling the market in opposite directions right now. On one hand, AI earnings are massive and real: Nvidia reported $81.6 billion in revenue (up 85% year-over-year) and corporate stock buybacks have hit roughly $741 billion this year. On the other hand, the Philadelphia Fed’s manufacturing index collapsed to -0.4 versus an expected 17.6, signaling a sharp slowdown in factory activity. Meanwhile, Fed meeting minutes revealed that most officials support raising rates if inflation keeps climbing, and CME data now puts the probability of a rate hike at 52%.
For your portfolio, this means the economy is sending mixed signals. The job market is still holding up — weekly unemployment claims came in at 209K, slightly better than expected — but manufacturing is weakening. Stocks heavily tied to AI are being rewarded, while the rest of the market may face more turbulence if rate-hike fears grow.
📖 Term of the Day
Stock Buyback — when a company uses its own cash to purchase its own shares on the open market, which reduces the number of shares available and can push the stock price higher. Why you care today: U.S. companies have spent roughly $741 billion on buybacks so far in 2026, on pace to top $1 trillion this year — that massive corporate demand is one of the key forces holding this market up.
💼 Watchlist: 3 Stocks to Know Today
Nvidia (NVDA) — “The Expectations Trap”
Nvidia posted $81.6B in revenue and guided next quarter to $91B — both well above estimates. Yet the stock weakened in after-hours trading because investor expectations were already priced for perfection, showing that even the best results can disappoint when the bar is set this high.
Intuit (INTU) — “The Caution Sign”
Intuit beat earnings estimates with $8.6B in revenue and raised its full-year outlook. But the company also announced it’s cutting about 3,000 jobs (17% of its workforce) as it shifts toward AI, and shares dropped 15.78% in pre-market trading — a reminder that layoffs can spook investors even alongside strong numbers.
GlobalFoundries (GFS) — “The Government Boost”
This chipmaker surged 12.64% in pre-market after receiving a $375 million grant from the U.S. government under the CHIPS and Science Act. The funding is designed to accelerate chip technology development, putting GlobalFoundries in a stronger position as the U.S. pushes to build more semiconductors domestically.
💬 Esther’s Take
