Markets edged higher this week with the Dow Jones Industrial Average once again trading above 50,000. From the perspective of what moved markets, it was a rather slow week. There was little news regarding Iran, yet oil prices trended lower on statements out of the White House that we’re in the “final stages” of negotiations. Inflation is still top of mind but only tangentially being talked about. Perhaps the most consequential news was the swearing in of Kevin Warsh, the new chair of the Federal Reserve. Yet, it is unclear what exactly he can do in the near-term given everything else that’s going on in the world. For now, we remain in a wait-and-see pattern as momentum pushes markets higher each week.
Perhaps the least talked about news but most consequential this week was the release of the minutes from the April Federal Open Market Committee (FOMC) meeting. The minutes revealed a deeply fractured central bank that is actively considering interest rate hikes rather than cuts. This creates an immediate problem for the newly sworn-in Fed Chair, Kevin Warsh whose goal is to cut interest rates. The notes revealed that 9 of the 12 voting members voted to remove language implying interest rates were on the downward trajectory. A majority also explicitly warned that rate hikes will likely become necessary if inflation remains above the 2% target. Kevin Warsh has his work cut out for him and unless inflation subsides soon, we’re most likely looking at a rate hike late 2026 or early 2027.
In other news, SpaceX officially announced plans for its IPO which could happen as soon as mid-June 2026. The company looks to raise up to $80 billion with a market cap of up to $2 trillion. Some of you are probably wondering whether this might be a good investment. Truth is it’s too soon to say. There is certainly a lot of hype around this IPO. SpaceX generated $18 billion in revenue in 2025. However, the company is unprofitable, posting an almost $5 billion loss in 2025 and a staggering $4.3 billion net loss in Q1 2026 alone. SpaceX has accumulated $29 billion in debt, primarily used to fund infrastructure. The one bright spot is Starlink which is solidly profitable, generating $4.2 billion in income. Space operations continue to be a draw as the company is spending heavily on R&D and Starship development. The big drag is SpaceXAI which posted a massive $6.4 billion operating loss in 2025 with capital expenditures expected to hit $7.7 billion in Q1 2026. The potential is large indeed. The question remains, when will the company become profitable?
As for corporate earnings, there were two big announcements this week. The first was Nvidia, which beat handily on both the top and bottom lines, but drew yawns from investors as so much of the good news is already priced into the stock. It’s hard to understate how well the company is doing. It reached a record $81 billion in revenue in Q1, marking an 85% year-over-year increase. Data center revenue surged 92% year-over-year to $75 billion. Even forward guidance for fiscal 2027 revenue came in $7 billion higher than expected and yet the stock looks to finish the week slightly down. Walmart, a bellwether stock, announced total revenue grew 7.3% year-over-year to $177 billion, but warned consumers are “increasingly value-driven, structurally under pressure, and highly uneven in their spending behaviors.” Forward guidance was slightly below estimates, causing some analysts to question the impact inflation is having on consumers. Investors picked up on the vibe, driving the stock solidly lower this week.
In closing, I turn to Memorial Day which we will celebrate on Monday. The holiday originated after the Civil War, a conflict that claimed more lives than any other war in U.S. history. The first official declaration was in 1868, when General John A. Logan called for a nationwide “Decoration Day” on May 30. After World War I, the holiday was expanded to honor all American troops who died in any war. In 1971, Congress declared it a federal holiday and moved it to the last Monday in May to create a three-day weekend. Let this day be a somber acknowledgement of the human cost of freedom.
Bruce J. Mason, MBA
