New York morning: Nvidia report and Fed minutes in focus

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The dynamics of the upcoming trading will be determined by expectations related to the publication of Nvidia's (NVDA) quarterly results after the closing of the main session. The consensus expects the company's revenue to reach a record $79 bln. The most important aspects of the release will be the company's own forecast, margin dynamics and management's comments on the prospects of achieving the long-term revenue goal of $1 trillion for the data center segment. We expect strong Nvidia's actual results, as well as a solid guidance. We expect the announcement of a large buyback program to attract new institutional investors whose strategies are focused on buybacks and dividends.

However, the report should turn out to be really impressive for the stock to rise strongly, as NVDA shares tend to correct lately when the investing community does not get the so-called wow effect from the release. A positive reaction will boost confidence in the AI cycle's ability to cap rate pressures. A negative reaction will hit those segments with high optimistic expectations. The options market predicts quotes to move 8.3% in one direction or the other.

The consumer staples sector, which is under pressure from high gasoline prices and mortgage rates, will also be in focus. The ratio between the sector XLY ETF and the S&P 500 has fallen to its lowest since 2012. We have seen increased outflows from said ETF since the beginning of the year. As such, data on traffic, average check and the ability of companies to pass on rising costs to the consumer are of particular importance to the investment community. Retailers focused on discount models, including TJX, may look steadier thanks to a shift in demand toward more affordable items. Lowe's and peers will remain sensitive to cooling housing demand and rate pressures.

The minutes of the April Federal Open Market Committee (FOMC) meeting - the Fed's "minutes" - will be the main macro event of the day. Of particular interest are the discussions on the feasibility of easing monetary policy (MPC) and the arguments of the committee members who see the need to tighten it. In our view, the regulator's leaders' views on the priorities will be divided between minimizing pro-inflationary risks amplified by the Middle East conflict and rising energy prices, and preventing further cooling of the labor market.

Quarterly results were released by Lowe's Companies (LOW) andTarget (TGT). TJX Companies (TJX), Hasbro (HAS), Roivant Sciences (ROIV), V.F. Corporation (VFC), Analog Devices (ADI). Following the main session, results will be released from Nvidia (NVDA), Intuit (INTU), e.l.f. Beauty (ELF), Nordson (NDSN), Urban Outfitters (URBN), EnerSys (ENS), StepStone Group (STEP).

Futures on US stock indices are trading in moderate plus. We assess the balance of risks for the upcoming session as neutral with increased volatility. Three consecutive sessions of decline, reaching multi-year highs in the yield of treasuries and geopolitical uncertainty force market participants to be cautious. Their activity may be restrained ahead of the publication of the FOMC minutes and Nvidia report.

- Shares in CAVA Group (CAVA) are up around 7% after posting quarterly results that beat revenue and profit expectations. Comparable sales were up 9.7%, with 6.8pc driven by traffic growth, a key indicator of demand quality. The company launched 20 new establishments, bringing the chain to 459 restaurants. Management raised its full-year EBITDA and comparable sales guidance, confirming continued strong expansion with stable margins.

- Keysight Technologies (KEYS) is up about 2% after the best quarter in its history. Orders exceeded $2 billion (+56% YoY), revenue increased 31%, and EPS significantly beat consensus. Management raised revenue guidance for the current fiscal year, citing solid demand in the AI infrastructure, wireline solutions, and aerospace segments. The restrained reaction of the issuer's securities was due to the general correction in the technology sector.

- Roblox (RBLX) is up about 3% after announcing its first buyback program of up to $3 billion, of which up to $1 billion is expected to be realized over the next 12 months. The size of the buyback, which is equivalent to about 9% of the issuer's market capitalization, is intended to offset the dilutive effect of employee stock option programs. Roblox's CFO emphasized that the decision was made possible by the company's strong free cash flow generation.

- Viavi Solutions (VIAV) shares are losing about 5% after announcing an additional issue of about $500 million at $45 per share. The raised funds will be used to repay the $450 mln Term Loan B loan, which will improve the balance sheet structure but creates a short-term risk of dilution of shareholders' stakes.

- Quotes of Red Robin Gourmet Burgers (RRGB) soared by almost 9% after the publication of quarterly results, which were better than expected against a low base. The share dynamics is largely due to the small capitalization of the issuer and a high volume of positions for sale, which increases volatility even with a moderate positive.

Trading on May 19 on American stock exchanges, as well as two previous sessions, ended in negative territory. The S&P 500 fell by 0.67%, the Nasdaq 100 lost 0.61%, the Dow Jones fell by 0.65%, and the Russell 2000 fell by 1.01%.

The main factor of pressure on the market was continuation of active growth of treasury bonds yields, the rate on 30-year securities reached the maximum since 2007. Additional negative factor was technical fixation of profit in shares of companies with high Beta and uncertainty of situation in Middle East.

Against this background, the securities of the "Magnificent Seven" traded mostly in the negative. The energy sector (XLE: +1.17%) and the health care industry (XLV: +1.1%) were the leaders of growth due to the flow of funds into protective assets and foreign policy risks. The outsiders were suppliers of raw materials (XLB: -2.35%), which suffered due to the strengthening of the dollar and a sharp jump in the yields of debt instruments.

The published macroeconomic statistics were mixed, but indicated continued pressure in some segments of the economy. The Pending Home Sales Index rose 1.4% m/m in Ma against a consensus of 1%, the March result was revised upward to +1.7%. The average rate on the 30-year mortgage jumped to its highest since July 2025 at 6.75%, while Redfin data showed that more than a third of U.S. real estate sellers were forced to cut prices in April. At the same time, weekly statistics from ADP recorded a slight acceleration in private sector hiring.

Foreign policy factors are curbing risk appetite and driving up energy prices. Despite the ceasefire between the US and Iran, the diplomatic impasse persists. The head of the White House threatened Tehran with a "serious blow" if negotiations fail. Tensions are exacerbated by Washington's new sanctions against Iran's shadow fleet and NATO's plans to escort ships through the Strait of Hormuz, which puts the risk of disruption of oil supplies in the prices.

- Amer Sports (AS: +2.1% at the close of trading on May 19) reported first-quarter revenue, profitability and earnings above average market expectations. The sporting goods maker's management raised guidance for 2026, citing intense performance improvement in all regions of operation and strong demand for Arc'teryx's premium apparel line.

- Strong government demand drove growth in cement sales volumes and allowed Eagle Materials (EXP: +1.7%) to report significantly above earnings guidance for the fiscal fourth quarter. Some pressure on the corporation's overall performance was exerted by weak performance in the drywall segment due to unfavorable housing construction.

- Driven Brands Holdings (DRVN: -7.1%) gave a 2026 outlook with median values below the Wall Street consensus due to the negative consumer sector environment. At the same time, the company said it has completed its audit and restated its financial results for previous reporting periods.

- CoreWeave (CRWV: -3.8%) quotations were under pressure from the news about the creation of cloud-based AI infrastructure by giants Alphabet (GOOGL) and Blackstone (BX). The market fears that this large-scale project with access to Alphabet's TPU chips will seriously escalate the battle for corporate customers in the high-performance computing segment.

- Pressure on T1 Energy (TE: -9.1%) was exerted by the statement of the short-oriented investment company Fuzzy Panda Research about the issuer's ties with China's Trina Solar and non-compliance with FEOC requirements. This poses a threat to cancel $41.4 million in tax credits already reported for the first quarter. Also, Fuzzy Panda analysts, citing aerial survey data, said that the construction of the G2 plant is 12-18 months behind schedule.

This article was AI-translated and verified by a human editor