What's on Tap? – May 24, 2026

As a strong first-quarter earnings season winds down, the high-flying U.S. stock market faces potential turbulence with investor focus shifting to a challenging macroeconomic picture. Spiking inflation, driven by the ongoing U.S.-Iran war, has pushed bond yields to multi-year highs and increased the probability of a Federal Reserve interest rate hike. In the week ahead, the market will be closely watching the release of the PCE inflation data, the Fed's preferred gauge, along with the final earnings reports from key retailers and tech companies.

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From Phoenixtra Pro in Tampa, it's Sunday, May 24th, and I'm Rachel Anderson with What's On Tap This Week. A key theme for this shortened trading week will be inflation. The recent sell-off in the bond market has Wall Street on edge. Last week, the 30-year treasury yield hit its highest level since 2007, and while yields pulled back slightly, they remain elevated. This is a significant headwind for stocks, as higher yields make borrowing more expensive for companies and consumers, which can make bonds look more attractive relative to equities. The key driver behind these rising yields is the fear that inflation is becoming entrenched, fueled by surge in oil prices from the ongoing US Iran war. This brings us to the main event of the week, Thursday's release of the April Personal Consumption Expenditures Price Index, or PCE. This is the Federal Reserve's preferred measure of inflation, and it follows recent reports that showed consumer and producer prices remained hot. The data will do little to ease concerns that months of elevated energy prices are feeding through the economy. This puts the Federal Reserve in a difficult position. Minutes from the Fed's last meeting showed officials are growing more concerned about price spikes, with a number of them now open to the possibility of raising interest rates if inflation doesn't cool. In a dramatic shift from the start of the year, futures markets are now pricing in the potential for a rate hike by the end of 2026. Also on the economic calendar, we'll get a fresh estimate of first quarter GDP, the latest consumer confidence print, and data on home sales and durable goods orders. As the parade of corporate earnings winds down, a few key reports will still provide insight into the health of the economy. The focus will be on the consumer, with results due from retailers Costco, Best Buy, and Dollar Tree. Investors will be watching closely for signs that high gas prices are forcing shoppers to pull back on other spending, especially after Walmart issued a conservative outlook last week. The AI theme also remains in focus. Following another stellar report from Chipmaker Nvidia, we'll hear from cloud software provider Salesforce and server maker Dell Technologies. Their results will offer another important barometer of the strength and durability of corporate spending on artificial intelligence. Looking at the bigger picture, two stories will continue to simmer in the background. First, the US-Iran war, now approaching its third month, remains the primary source of global uncertainty and inflationary pressure. And second, the disruptive power of AI on the labor market is becoming a major topic after executives at Standard Chartered, JP Morgan and HSBC all warned of significant job changes as technology replaces what one CEO called lower value human capital. So, as we head into the last week of May, with earnings season largely in the rearview mirror, the question will be: can the high-flying stock market withstand the headwinds of rising yields and persistent inflation? And Thursday's PCE report will be the pivotal data point in a week where the big picture economic story is back in the driver's seat. And that's what's on tap for the week. I'll be off tomorrow for the holiday, but we'll be back Tuesday with an all new daily rap. Till then, I'm Rachel Anderson from Phoenixstra Pro, turning data into stories.