A holiday-shortened Wall Street trading week is kicking off with major tests for software stocks, retail giants, and interest rate expectations. Our team is watching a convergence of high-stakes earnings, economic data, and investor conferences over the next four days, and this setup demands attention from traders holding tech and consumer discretionary positions.
Three Events That Will Set the Tone This Wall Street Trading Week
We're tracking three primary events during this condensed trading week: key earnings reports from major software and retail companies, critical economic data including the Fed's preferred inflation gauge, and investor conference updates from the Bernstein Strategic Decisions Conference. These releases will shape market sentiment through the end of the month.
The Key Numbers: What We Know Right Now
On Wednesday night, Salesforce (CRM) reports earnings with Wall Street expecting $11.05 billion in revenue and $3.12 in EPS. On Thursday, Costco (COST) follows with estimates of $69.73 billion in revenue and $4.93 in EPS.
Thursday's Inflation Print: The personal consumption expenditure price index is expected to show a 3.8% year-over-year increase for the headline reading and a 3.3% increase at the core level. This is the Fed's preferred inflation gauge, and a hot number could move markets aggressively.
Can Software Stocks Prove AI Is Generating Real Revenue?
Artificial intelligence is forcing software companies to prove their new tools can generate real revenue to offset fears of legacy business disruption. The fears that AI will disrupt Salesforce's business are alive and well, as Bank of America's sell call on the stock last week showed.
CRM remains a battleground stock. We're specifically watching the company's Agentforce platform. In February, Agentforce recorded $800 million in annual recurring revenue, representing about 2% of total revenue. The company reported that more than 29,000 deals had been closed since launch.
The market needs to see these numbers expand. We're also watching the current remaining performance obligation metric. Last quarter showed 9% organic growth in this area. Guidance for the April quarter sits at 9% organically, or 13% total with the Informatica acquisition included. The consensus projects operating margins at 33.4%, implying 1.2 percentage points of year-over-year expansion.
The reaction Friday to Workday's quarter indicates the market is capable of celebrating a good software quarter.
CRM Earnings Watch: Salesforce is consolidating from five reporting segments down to two. Traders should expect a restructured earnings report on Wednesday night. The Agentforce ARR number and remaining performance obligation growth are the two figures that will move this stock.
Is the American Consumer Holding Up?
Several major retailers recently reported that the consumer is already under stress, and it's translating into changes in buying behavior. The more the consumer is strained, the more they hunt for value, and few can beat Costco's membership model and bulk selling strategy on that front.
We're closely monitoring COST as a primary indicator of consumer health. The stock has seen a 10-day price change of -1.97%. High oil prices, with crude holding around the $100 level, are squeezing wallets.
This dynamic often drives traffic to Costco's locations because the company typically offers the lowest price for gas in their area. As analysts at JPMorgan noted, whenever gas spikes, a Costco membership is more attractive, as is the credit card with its cash back on gas purchases. We're tracking the United States Oil Fund (USO), which shows a 10-day price change of -4.93%.
Traders should watch Costco's membership renewal rates closely. The U.S. renewal rate has slipped in recent quarters as the company courted online sign-ups, which skew younger. People who join digitally renew at a lower rate than those who signed up in-store. Costco has taken steps to improve retention, such as targeted marketing, and we want proof it's paying off.
Tax returns likely provided some benefit in the quarter, so we'll be interested to hear about buying patterns as that benefit started to diminish.
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Join Traders AgencyWhat Does Thursday's PCE Inflation Print Mean for Rate Expectations?
The primary inflation release this Wall Street trading week is Thursday's personal consumption expenditure price index, which serves as the Federal Reserve's preferred proxy for inflation. Traders will also see the second read on first-quarter gross domestic product and new home sales data on Thursday morning.
The stakes for this data are high. The CME FedWatch Tool currently assigns a 42% probability of no rate cuts by year-end. There's also a 41% chance of a quarter-point hike and a 15% chance of two hikes.
With oil prices elevated and bond yields rising, the Fed is in a tough spot because these inflationary signals indicate the central bank needs to hold, if not raise rates, to keep inflation from getting out of hand once again. Fed Chair Kevin Warsh, who was sworn in Friday, faces a difficult position. A hot inflation report could increase the odds of a hike even further. Reopening the Strait of Hormuz could be the single most important development needed to get oil moving back down and bond yields following, freeing Warsh to lower rates.
President Donald Trump stated over the weekend that talks with Iran were moving in a "constructive" manner. As a result, oil prices began falling on Monday while commodities traded through the Memorial Day holiday.
What Are the Key Market Events This Trading Week?
Our team is tracking a specific sequence of events for this trading week. Here are the primary targets on our radar:
- Wednesday After the Bell: CRM releases earnings. We're watching for the transition from five reporting segments down to two, and the Agentforce ARR update is the single most important line item.
- Wednesday and Thursday: The Bernstein Strategic Decisions Conference takes place. Executives from Boeing, Johnson & Johnson, GE Vernova, and Wells Fargo are scheduled for Wednesday. Eli Lilly and Starbucks are scheduled for Thursday.
- Thursday at 8:30 a.m. ET: The PCE price index, initial jobless claims, and the second read on Q1 GDP drop simultaneously. New home sales data follows at 10 a.m. ET. This is the highest-volatility window of the week.
- Thursday After the Bell: COST reports earnings. We're focusing on profit margins, membership renewal trends, and what management shares about changes in consumer shopping patterns.
The Bottom Line
This condensed Wall Street trading week forces traders to digest massive data points in a short window. Our research team is watching for potential volatility around Thursday's inflation print and retail earnings. We expect the software sector to react to the AI revenue numbers reported on Wednesday night. If you're holding positions in CRM, COST, or rate-sensitive names, this is the week to have your plan locked in before the data arrives.
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Join Traders AgencyKey Takeaways
- Salesforce reports Wednesday with Wall Street expecting $11.05 billion in revenue and $3.12 EPS. AI revenue commentary from management will be the real market mover, not the headline numbers.
- Costco reports Thursday with estimates of $69.73 billion in revenue and $4.93 EPS. Watch for consumer spending pattern signals, not just the beat or miss.
- Thursday's PCE inflation print is expected at 3.8% headline and 3.3% core year-over-year. A hotter-than-expected reading could aggressively reprice rate-sensitive positions.
- This is a four-day trading week, which compresses the reaction window. Traders holding CRM, COST, or rate-sensitive names face multiple high-impact events with less time to adjust.
- The Bernstein Strategic Decisions Conference runs alongside earnings and economic data, adding a third layer of potential market-moving commentary to an already loaded week.
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