The Weekly Wrap – May 23, 2026

This week, the market contended with conflicting forces as record-low consumer sentiment, driven by war-fueled inflation, contrasted sharply with a massive investment wave in artificial intelligence. The AI boom was exemplified by Nvidia's strong earnings and a new Google-Blackstone cloud venture, but the week's biggest story was SpaceX officially filing for its nearly $2 trillion IPO. This complex environment of geopolitical tension and technological disruption creates an immediate and significant challenge for new Federal Reserve Chair Kevin Warsh, who must now navigate the path forward on monetary policy.

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Transcript

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From Phoenixstra Pro in Tampa, it's Saturday, May 23rd, and I'm Rachel Anderson with your weekly rap. The main story driving markets remains the US-Iran war. The conflict has kept oil prices elevated, with Brent crude hovering over $100 a barrel. This has directly impacted the American consumer, with sentiment plunging to a new record low in May. They're worried that inflation, now expected to hit 4.8% over the next year, will spread beyond the gas pump. The housing market is also feeling the pressure, with single-family housing starts tumbling in April as mortgage rates rise. Despite this, the labor market showed resilience, with weekly jobless claims falling slightly. All of this creates a challenging backdrop for new Federal Reserve Chair Kevin Walsh, who was sworn in on Friday. He takes the helm of a central bank facing intense pressure to tame inflation, with some policymakers already suggesting a right hike could be on the table. But the biggest single story of the week was the official unveiling of the SpaceX IPO. The company seeking a valuation of nearly $2 trillion is betting investors will buy into Elon Musk's ambitious vision of rockets, satellite internet, and space-based AI data centers. The S1 filing revealed that while the Starlink internet business is profitable, the company as a whole is burning cash. Posting a $4.28 billion loss in the first quarter, driven by the development of the next generation Starship rocket and its XAI division, the filing also confirmed Musk's iron grip on the company, controlling 85% of the vote. However, it wasn't all good news for Musk this week, he lost his court battle against OpenAI after a jury found his lawsuit was filed outside the statute of limitations. Chip leader NVIDIA delivered a Niller knockout earnings report with sales up 85%, but the stocks' reaction was muted as investors questioned if the massive run-up was sustainable. Google and private equity giant Blackstone announced a joint venture to create a new AI cloud company backed by a $5 billion investment that will use Google's own chips to compete with NVIDIA. The US government is also getting in on the action, announcing a funding pact to foster the domestic quantum computing industry, sending shares of IBM and other quantum firms soaring. In the music world, Spotify share surged after it announced a deal with Universal Music to create AI-powered tools for remixes, alongside bullish guidance for the years ahead. The AI-driven demand for energy fueled a massive merger, with Nextera Energy announcing a $66.8 billion deal to buy Dominion Energy, creating the world's largest regulated utility. In healthcare, it was a tale of two outcomes. Eli Lilly announced its next generation weight loss drug, Rita Truetide, helped patients lose an average of 28% of their body weight in a late-stage trial. In contrast, shares of Regeneron sank after its experimental melanoma drug failed to beat Merck's blockbuster Key Truda in a key trial. And we got a look at the American consumer through the lens of retail earnings. Warehouse clubs are thriving as shoppers hunt for value, BJ's wholesale reported rising revenue and membership growth. Walmart also beat expectations, gaining market share across all income levels, though it maintained a cautious outlook due to high gas prices. But Home Depot reported lower profits, noting that homeowners are holding off on large-scale projects due to economic uncertainty and rising interest rates. U.S. Treasury yields were mixed this week with the 30-year yield hitting its highest level since 2007 on Tuesday. At the end of the week, the 10-year was at 4.55%, the two-year yield was at 4.12%, and the 30-year bond yield was at 5.06%. Finally, let's check the scoreboard. Wall Street finished in the green despite a volatile week of trading. The SP finished up almost 1%, the Dow closed out up over 2%, and the NASDAQ ended with gains of roughly a half a percent. And that's a wrap for the week. I'm Rachel Anderson from Phoenixtra Pro turning data into stories.