Finance

First-quarter earnings for S&P 500 companies have significantly exceeded expectations, with total profits up over 21% compared to the previous year. Nvidia's latest results reinforced the sustainability of the AI investment cycle, while industrial giants like Cummins and GE Vernova are seeing increased orders for power generators driven by data center demand. Despite this strength, some retail heavyweights like Walmart have issued cautious guidance due to pressure on lower-income consumers from inflation.

The yield on the benchmark 10-year Treasury note ended the week around 4.56%, remaining near historically high levels despite recent cooling. Earlier in the week, the 30-year yield touched its highest point since 2007, exceeding 5.19% due to persistent inflation fears and the impact of federal spending. Market analysts suggest that while yields have eased slightly from their peaks, they continue to exert pressure on consumer borrowing costs and equity valuations.

U.S. headline inflation accelerated to 3.8% in April 2026, marking the highest rate since mid-2023, largely driven by energy costs and war-related supply shocks. The confirmation of Kevin Warsh as the new Federal Reserve Chair has led markets to price in an extended period of elevated interest rates, with a less than 3% probability of a rate cut this year. Current policy maintains the federal funds rate at 3.50% to 3.75%, though officials have signaled a willingness to hike further if price pressures do not abate.