Let’s be direct about what happened this week: Nvidia reported the most impressive single quarter in the history of publicly traded technology companies, and Wall Street mostly yawned.
That’s not a complaint about Nvidia. It’s a diagnosis of the market we’re currently in — and understanding the disconnect matters a lot if you’re trying to make sense of where things go from here.
The Quarter That Should Have Moved Everything
Nvidia’s Q1 FY2027 results, reported Wednesday after the close, were genuinely historic. Revenue came in at $81.6 billion — up 85% year-over-year and 20% from the prior quarter. Data center revenue alone hit $75.2 billion, up 92% from a year ago. Adjusted gross margin held at 75%, confirming that Nvidia’s pricing power remains intact despite accelerating competition from AMD and custom silicon out of the hyperscalers.
The company didn’t just beat on the top and bottom lines. It also announced an $80 billion share buyback authorization and raised its quarterly dividend from $0.01 per share to $0.25 — a 25-times increase in a single announcement. CoreWeave, in which Nvidia holds an 11% stake, climbed more than 4% in sympathy.
“Overall, the quarter was a solid beat-and-raise, with guidance firmly above estimates and data center revenue accelerating on a year-over-year basis,” said Nathan Peterson, director of derivatives research at the Schwab Center for Financial Research. Analysts had flagged 75% or above gross margin as the threshold that would confirm pricing power stays intact. Nvidia cleared it.
By any normal measure, this is the kind of report that launches a stock to new highs and drags the broader tech sector with it. Instead, the NASDAQ posted a fractional loss for the week.
What the Market Is Actually Looking At
The answer isn’t complicated, but it is uncomfortable: macro headwinds are currently louder than any individual company’s fundamentals, no matter how good those fundamentals are.
Four things are weighing on sentiment simultaneously.
Crude oil crossed $100 a barrel again. Iran’s supreme leader insisted this week that enriched uranium stays in the country, putting a ceiling on peace-deal optimism. Every U.S. state now averages above $4 per gallon of regular gasoline — $4.56 nationally as of Thursday, the highest heading into Memorial Day weekend since 2022. Rising energy costs feed directly into inflation expectations and compress consumer discretionary spending, which is why even strong earnings from Walmart couldn’t hold the stock up. Walmart fell 2% Thursday despite beating on revenue, as investors zeroed in on below-consensus Q2 guidance partly driven by higher fuel costs hitting the company’s operating income.
The 10-year Treasury yield ended the week at 4.59%. That’s up from below 4.00% as recently as late February — roughly a 60 basis point move in three months. When yields rise this fast, equities feel it regardless of earnings quality. As the Schwab team put it: “How fast yields climb can have a different impact on the market than the level of yields alone.”
April CPI printed at 3.8% year-over-year — the hottest reading since May 2023. Airfares are up 20.7% from a year ago. Lodging is up 4.3%. Dining out is up 3.6%. The re-acceleration in inflation is particularly unwelcome because it arrives just as the Fed changes hands.
Kevin Warsh is being sworn in as Federal Reserve Chairman today. He replaces Jerome Powell, whose final policy act held the benchmark rate at 3.50–3.75%. Warsh has historically favored a more hawkish posture than Powell. Markets don’t yet know what Warsh-era Fed policy looks like under a 3.8% CPI environment, and that uncertainty is a genuine overhang. His first public statements in the new role will be closely watched.
The Week’s Other Storylines
Beyond Nvidia, the week produced some notable wreckage alongside the winners.
Intuit fell 14% Thursday despite beating earnings estimates and issuing above-consensus guidance. The culprit was weaker TurboTax performance and a surprise announcement that the company plans to cut 17% of its workforce. Deere fell nearly 4% despite topping both earnings and revenue estimates, as investors focused on “ongoing challenges” in global agricultural markets.
On the bright side, the software sector has now climbed 20% from its April lows, led by ServiceNow after a Bank of America buy rating earlier this week. IBM gained 6% and Rigetti surged 15% after the U.S. government announced grants to roughly a dozen quantum computing companies — IBM plans to spin out a new quantum foundry called “Anderon” co-funded with government backing.
The S&P 500 technically recorded its seventh straight weekly gain, but at +0.2% it barely qualifies. The NASDAQ and Dow both finished in fractional negative territory for the week.
What to Watch Next Week
The holiday-shortened week after Memorial Day is loaded. U.S. markets are closed Monday. When they reopen Tuesday, the earnings calendar accelerates fast: Salesforce and Snowflake report Wednesday, followed by Marvell Technology, then Dell, Costco, MongoDB, Best Buy, Autodesk, and Gap on Thursday. The Q1 GDP second estimate and April PCE inflation data also land Thursday — PCE is the Fed’s preferred inflation gauge, and given the hot April CPI, it will carry extra weight as Warsh settles in.
The macro picture Nvidia walked into this week isn’t going away. But the fundamentals it delivered are real, and eventually, fundamentals win. The question is how long “eventually” takes when crude is at $100 and the new Fed Chair hasn’t tipped his hand yet.