Nvidia Can't Halt Early Retreat Fueled by Crude
Published as of: May 21, 2026, 9:11 a.m. ET
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| The markets | Last price | Change | % change |
|---|---|---|---|
| S&P 500® Index | 7,432.97 | +79.36 | +1.08% |
| Dow Jones Industrial Average® | 50,009.35 | +645.47 | +1.31% |
| Nasdaq Composite® | 26,270.36 | +399.65 | +1.54% |
| 10-year Treasury yield | 4.61% | +0.04 | -- |
| U.S. Dollar Index | 99.30 | +0.03 | +0.02% |
| Cboe Volatility Index® | 17.70 | +0.26 | +1.49% |
| WTI Crude Oil | $100.55 | +$2.30 | +2.35% |
| Bitcoin | $77,280 | -$425 | -0.55% |
(Thursday market open) Earnings from Walmart (WMT) and Nvidia (NVDA) took their respective stock prices different ways early while major indexes gave back some of Wednesday's gains, apparently unimpressed by solid quarters for both. Beyond corporate news, U.S. crude topped $100 per barrel again and the 10-year Treasury note yield edged up to 4.6%, both potential headwinds for investors focused on the Middle East where Iran's supreme leader insisted enriched uranium stay in the country, news reports said. Global oil stocks are rapidly depleting and U.S. crude stockpiles fell for the fourth straight week.
Nvidia topped consensus and delivered firm guidance and margins, though shares only inched up. "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 and strategy at the Schwab Center for Financial Research (SCFR). Gross margin at 75% on an adjusted basis was in line with the company's own guidance and above consensus of 74.5%. Heading in, analysts felt 75% or above would help confirm that Nvidia's pricing power remains intact—a key element as competition advances. Nvidia also raised its dividend and announced $80 billion in new share buybacks.
Major indexes stormed back Wednesday to end a three-day losing streak. Eight of 11 S&P 500 sectors ended higher, led by consumer discretionary as yields and oil fell, easing fears of higher borrowing costs. The discretionary sector faces possible pressure today from Walmart, shares of which fell in the early hours despite quarterly revenue that topped analyst estimates and in-line earnings per share. A slightly weak second-quarter outlook appeared to be the culprit. In data today, April housing starts and building permits topped expectations, with permits up nearly 6% from March.
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Three things to watch
- Holiday road: Gasoline now costs more than $4.50 a gallon across the U.S., the highest heading into Memorial Day weekend since 2022. The weekend is significant because it historically represents the start of U.S. "driving season" extending to Labor Day in early September. Travel is typically busy on Memorial Day weekend, but recent inflation data pointed to much higher airfares, meaning investors might want to look at travel data when they return from the holiday next Tuesday. Any lag in air travel—there's no sign of one yet—might suggest consumers pulling back in the face of rising prices. Last year, Memorial Day air travel peaked on the Friday before the holiday at 3.01 million, followed by 2.86 million on the holiday itself, according to The Transportation Security Administration's (TSA) checkpoint travel site, which is updated daily. Beyond travel, for the most part higher oil prices haven't yet worked their way into consumer prices, meaning there could be more pain to come.
- Software rebound eyed: After taking it on the chin earlier this year, software shares have climbed 20% from their April lows, led by ServiceNow (NOW), which got a buy rating from Bank of America earlier this week. Though the sector remains burdened by ideas AI could pose competition, ServiceNow and others have long offered AI products of their own and say AI could be a boost for the industry. Last week, ServiceNow announced a partnership with a Dublin software firm to use autonomous AI agents to process business data. Adobe (ADBE), meanwhile, earlier this year released CX Enterprise, which tied together its three core content supply chain products, Barron's reported. This got a positive response from Nvidia's Huang at Adobe's product event in late April, endorsing the AI use case for Adobe's products. The rub? Nvidia and Adobe have a strategic partnership, so Huang wasn't necessarily a neutral observer. Software earnings pick up next week as Salesforce (CRM) and Snowflake (SNOW) open their books Wednesday followed by Autodesk (ADSK) on Thursday. "Software versus semis is finally seeing some mean reversion," my colleague Peterson said earlier this week when software shares gained on chips. Software shares generally fell early today, however, with investors disappointed by results from Intuit (INTU).
- Pace of rally, not level, key for yield watchers: The 10-year Treasury note yield was up about 40 basis points over the last month at its peak near 4.66% this week, a fairly quick ascent, historically. This reinforces something investors should remember: How fast yields climb can have a different impact on the market than the level of yields alone. "Over the past five years, sharp moves higher have been consistent with weakness in stocks, but in level terms, both yields and stocks have risen," noted Kevin Gordon, head of macro research and strategy at SCFR. Inflation concerns can cause yields to climb, but so can hope for stronger economic growth. Determining which aspect the market is more focused on can help decide the direction of equities in response. Right now, one could argue for both. Inflation is obviously a worry and there's growing concern the Federal Reserve might have to hike rates. But the economy remains resilient, with 4.3% unemployment, strong earnings growth, and an Atlanta Fed GDPNow tool that shows the economy pacing for 4% gross domestic product (GDP) this quarter. For more insight on the economy, it might be worth checking what, if anything, incoming Fed Chairman Kevin Warsh has to say when he's sworn into office tomorrow.
Crypto currents
Bitcoin bear market wounds are slow to heal: Bitcoin investors are learning an old lesson: It takes time to recover psychologically from the pain of a bear market. The cryptocurrency's roughly 30% rally from its February low had fueled hope of a new bull market among some investors. But a convergence of technical obstacles around $82,000 has served as strong resistance. The most obvious was the 200-day moving average. Bitcoin approached it several times in recent weeks, failing to poke its head above it even for a minute. The 200-day also sits in a natural profit-taking zone around $82,000. That's roughly the average cost basis for investors in bitcoin exchange-traded products (ETP), while $78,000 is the average cost basis for more-active investors in the secondary market. And after a months-long bear market, many investors are naturally selling at those "break-even" levels, said Jim Ferraioli, director of crypto research and strategy at SCFR. Any move beyond this month's short-term high around $82,759 will need to overcome that urge to get out and leave the painful bear market in the past. For now, the recent gains are just a bear market rally.
" id="body_disclosure--media_disclosure--208571" >Bitcoin bear market wounds are slow to heal: Bitcoin investors are learning an old lesson: It takes time to recover psychologically from the pain of a bear market. The cryptocurrency's roughly 30% rally from its February low had fueled hope of a new bull market among some investors. But a convergence of technical obstacles around $82,000 has served as strong resistance. The most obvious was the 200-day moving average. Bitcoin approached it several times in recent weeks, failing to poke its head above it even for a minute. The 200-day also sits in a natural profit-taking zone around $82,000. That's roughly the average cost basis for investors in bitcoin exchange-traded products (ETP), while $78,000 is the average cost basis for more-active investors in the secondary market. And after a months-long bear market, many investors are naturally selling at those "break-even" levels, said Jim Ferraioli, director of crypto research and strategy at SCFR. Any move beyond this month's short-term high around $82,759 will need to overcome that urge to get out and leave the painful bear market in the past. For now, the recent gains are just a bear market rally.
On the move
- Walmart (WMT) fell 2% despite the solid quarterly results. Focus shifted to guidance, which is $0.72 to $0.74 for second quarter earnings, below the $0.75 FactSet consensus. Guidance for the full fiscal year was unchanged. Second-quarter sales guidance didn't change, but higher fuel costs appear to be hurting the company's operating income, which fell sequentially in the first quarter.
- Deere (DE) slid almost 4% after reporting earnings and revenue that topped analysts' estimates. Guidance was unchanged. Shares initially rose early Wednesday on the earnings beat, then fell, as Deere still faces what it calls "ongoing challenges" within global agricultural markets.
- Intuit plunged 14% despite earnings topping expectations and revenue meeting expectations. The maker of TurboTax and QuickBooks also issued above-consensus guidance. Intuit also plans to cut 17% of its labor force, and analysts noted weaker performance in TurboTax.
- IBM (IBM) and Rigetti Computing (RGTI), both of which have exposure to quantum computing, rose 6% and 15%, respectively before the bell on news the U.S. government would give grants to nearly a dozen companies in the industry, Barron's reported. As part of the deal, IBM said it plans to create a new company called Anderon to serve as a quantum foundry. The company will be funded by both IBM and the U.S. government.
- CoreWeave (CRWV) climbed more than 4% in early action, lifted by solid earnings from Nvidia, a key partner of the company. Nvidia has an 11% stake in CoreWeave. Shares of Japan's SoftBank rose 20% amid AI enthusiasm after Nvidia reported.
- Kroger (KR) dropped 4% this morning. The company's new CEO wants to cut prices to gain market share back versus Walmart and other grocery stores, Bloomberg reported.
- Applied Digital (APLD) rose almost 10% after issuing a release saying it's entered a long-term lease agreement with a U.S.-based hyperscaler.
- Rate- and inflation-sensitive names did an about-face Wednesday after sliding Tuesday. Airlines, cruise lines, homebuilders, and automakers generally gained ground. Apparel and sporting goods also rose after Target's (TGT) solid earnings, with Nike (NKE), Gap (GAP), and Macy's (M) climbing.
- Crude's climb back above $100 today reflected cross currents on the Iran front. Though the market appeared disappointed by Iran insisting on keeping enriched uranium, one of Iran's semi-official news agencies also said the latest U.S. proposal has "narrowed gaps to some extent," Bloomberg reported.
More insights from Schwab
Pros and cons of borrowing against investments: Borrowing against your assets can often act as a tool to manage wealth—but is also risky. This Schwab article explains various strategies people adopt to use debt strategically and leverage their assets.
Chart of the day
Data sources: CME Group. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
Bitcoin futures (/BTC, candlesticks) have outperformed both ether futures (/ETH, cyan line) and solana futures (/SOL, purple line) since the crypto flash crash of October that preceded the current bear market. Ether tracked bitcoin closely until the near-term bottom was reached in early February.
The week ahead
Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.
May 22: Final May University of Michigan Consumer Sentiment.
May 25: U.S. markets closed for Memorial Day holiday.
May 26: May consumer confidence and expected earnings from AutoZone (AZO) and Zscaler (ZS).
May 27: April new home sales and expected earnings from Dick's Sporting Goods (DKS), Marvell Technology (MRVL), Salesforce (CRM), Synopsys (SNPS), and Snowflake (SNOW).
May 28: First quarter GDP second estimate, April Personal Consumption Expenditures (PCE) prices, and expected earnings from Dell (DELL), Dollar Tree (DLTR), MongoDB (MDB), Best Buy (BBY), Costco (COST), AutoDesk (ADSK), and Gap (GAP).