It may be a holiday-shortened week of trading on Wall Street. But the four days are filled with updates on some of the market’s biggest debates: Is AI eating software? Is the American consumer OK? And what’s happening with inflation? Let’s get into it. 1. Earnings: Salesforce reports on Wednesday night. Unfortunately, the stock has not become any less of a battleground since its last earnings report in late February. The fears that artificial intelligence will disrupt its business are alive and well, as Bank of America’s sell call on the stock last week shows. The stock chart shows it too. The reality is, Salesforce won’t vanquish these existential concerns with one strong earnings report Wednesday. But a journey of a thousand miles begins with a single step, and Jim Cramer has said we’re willing to give CEO Marc Benioff a chance to show progress. So, what would a step in the right direction look like? It starts with strong revenue growth for Agentforce, its platform for building AI agents capable of taking action with limited human intervention. In February, Agentforce was doing $800 million in annual recurring revenue, about 2% of its total, and more than 29,000 deals had been closed since launch. Where are these numbers now? The reaction Friday to Workday’s quarter indicates the market is capable of celebrating a good software quarter. At the same time, investors are worried about slowing growth in Salesforce’s legacy business, where it relies on seat-based licenses. For that reason, Salesforcce will need to deliver adequate performance on other metrics, particularly current remaining performance obligation (cRPO), which measures contracted revenue expected to be realized in the next 12 months. Last quarter’s 9% organic growth in cRPO was a slight disappointment. Its guidance for the April quarter was also 9% organically, or 13% in total when including a 4% benefit from its Informatica acquisition . Operating margins will be another gauge of the company’s overall health, with the FactSet consensus coming in at 33.4%, implying 1.2 percentage points of year-over-year expansion. One more thing to call out: Salesforce is rolling out new reporting segments with this release, going from five to two. It’ll provide the numbers in both the new and old format for now, but analysts may ask management to explain their rationale on the earnings call. That was the case last week when Nvidia made a change to its segment structure. Here’s what the Street is expecting, according to estimates compiled by LSEG: Revenue: $11.05 billion EPS: $3.12 Costco’s quarterly results are due Thursday night. The company releases sales numbers monthly, so the top line isn’t the focus when it reports. Instead, it’s all about profit margins, earnings, membership renewal trends, same-store sales, and what management has to share on the call about any changes in consumer shopping trends. The U.S. renewal rate, in particular, is something to watch because it’s slipped in recent quarters as the company courted online sign-ups, which skew younger. The problem is people who join digitally renew at a lower rate than folks who signed up in-store. Costco has taken steps to improve its retention, such as targeted marketing, and we want proof it’s paying off. High oil prices are weighing on consumers , but Costco is unique in that the dynamic can drive traffic to its locations because the company typically offers the lowest price for gas in their area. Costco’s membership model already helps to ensure loyalty while the bulk selling strategy ensures those members get the best value in town. In periods of soaring gas prices specifically, people seek out value with increased vigor. As analysts at JPMorgan put it in a note last month, “Whenever gas spikes, a [Costco] membership is more attractive, as is the credit card (5%/4% cash back on gas purchases).” Of course, if you’re already headed to the Costco parking lot to fill up the tank, you may as well stock up on some pantry items and groceries while seeing what other deals are to be had. To be sure, the increased fuel prices may pinch Costco’s profit margins, but that is an understood dynamic on Wall Street. 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. Ultimately, the more the consumer is strained, the more they will hunt out value. Between Costco’s membership model and bulk selling strategy, few, if any, can beat it on value. Here’s the LSEG consensus: Revenue: $69.73 billion EPS: $4.93 2. Economic data: The bulk of investor attention will be on Thursday’s personal spending and income report, which contains the personal consumption expenditure (PCE) price index. That’s the Federal Reserve’s preferred proxy for inflation. As of Friday, economists are expecting to see a 3.8% year-over-year increase for the headline index, according to FactSet. At the core level, which excludes more volatile energy and food prices, a 3.3% increase is expected. With oil holding around the $100 level, the odds of a Fed rate cut this year have vanished. The question now: can we at least avoid a hike? With fuel costs rising and bond yields moving up in response, the Fed is in a tough spot because these inflationary signals indicate the central bank needs to hold, if not raise rates, to keep the inflation from getting out of hand once again. It would likely be much worse this time around given inflation was already above the Fed’s 2% target before the war and the post-pandemic inflation spike is still recent history. Just last week, we heard from several major retailers that the consumer is already under stress , and it’s translating into changes in buying behavior. Therein lies the Fed’s conundrum. A strained consumer points to a potentially slowing economy, given consumer spending accounts for roughly two-thirds of U.S. gross domestic product. A slowing economy calls for rate cuts, but rising inflation traditionally calls for hikes. For now, we’re OK — unemployment remains at bay and consumers are managing. However, the dynamic means that there is a lot riding on next week’s inflation report. As of Friday, the market is assigning a 42% chance of no rate cuts by year-end, a 41% chance of a quarter-point hike, and a 15% chance of two hikes, according to the CME FedWatch Tool . A hot inflation report next week stands to increase the odds of a hike even further — something nobody wants to see. Not the investors pricing assets on Wall Street, nor the Americans on Main Street who want nothing more than to see some relief on mortgage rates and the price of oil. That’s why the single most important thing for both Wall Street and Main Street is to see the Strait of Hormuz reopened. This singular event can be the catalyst needed to get oil moving back down and bond yields following, freeing Fed Chair Kevin Warsh to lower rates. Warsh was sworn in Friday. The good news is that President Donald Trump said this weekend talks with Iran were moving in a “constructive” manner , and oil prices were falling in response Monday (commodities are trading despite the U.S. stock market being closed for Memorial Day). Another economic report on our radar is the second read on first-quarter GDP on Thursday. It’s backward looking, so it won’t be as influential as the PCE report. However, it will help us better understand the economy’s starting point prior to the war with Iran (technically, the war was going on during March, the final month of the first quarter, but the effects in April and now May are more significant). The new home sales report on Thursday is also one to watch. At the Club, we like to say housing punches above its weight in the economy, thanks to all the other purchases that come with buying a new home such as services, appliances, furniture and so on. Any signs of more inventory or increased affordability will be welcome. Unfortunately, it’s going to be of little help until we get some real relief on mortgage rates. Home Depot is the Club stock most tied to the housing market. Its earnings report last week showed that business isn’t terrible , but it won’t be good until housing turnover picks up. 3. Conference updates: We’re entering investor conference season on Wall Street — that stretch between quarterly earnings season, when companies aren’t in quiet periods, and banks bring in executives and their clients for Q & As and presentations. The big one for us at the Club is the Bernstein Strategic Decisions Conference. On Wednesday, Boeing , Johnson & Johnson , GE Vernova and Wells Fargo are set to make appearances, according to the conference’s website . Eli Lilly and Starbucks are scheduled to be there on Thursday. We’ll keep our eyes peeled for any notable disclosures and headlines. Even if we don’t get a ton of substantive updates from the executives, the questions that analysts ask during Q & As can signal what kind of debates and conversations they’re having with clients. There’s value in that too. Week ahead Monday, May 25 U.S. stock market closed in observance of Memorial Day Tuesday, May 26 FHFA House Price Index at 9 a.m. ET Before the bell: Elbit Systems (ESLT), AutoZone (AZO) After the bell: ZScalers (ZS), Chemical & Mining (SQM), BOX (BOX) Wednesday, May 27 Bernstein Strategic Decisions Conference Before the bell: Bath & Body Works (BBWI), Bank of Nova Scotia (BNS), Capri Holdings (CPRI), Dick’s Sporting Goods (DKS), Pinduoduo (PDD), Abercrombie & Fitch (ANF), Bank of Montreal (BMO), Dycom (DY) After the bell: Salesforce (CRM) , Marvell (MRVL), Snowflake (SNOW), HP (HPQ), Synopsys (SNPS) Thursday, May 28 Bernstein Strategic Decisions Conference Personal consumption expenditures (PCE) index at 8:30 a.m. ET Initial jobless claims at 8:30 a.m. ET Second read on Q1 GDP at 8:30 a.m. ET New home sales at 10 a.m. ET Before the bell: Best Buy (BBY), Hormel Foods (HRL), Canadian Imperial Bank (CM), Kohl’s (KSS), XPeng (XPDV), Burlington (BURL), Royal Bank of Canada (RY) After the bell: Costco (COST) , Dell Technologies (DELL), UiPath (PATH), MongoDB (MDB), Autodesk (ADSK), SentinelOne (S), Okta (OKTA), Gap (GAP), NetApp (NTAP), American Eagle Outfitters (AEO) Friday, May 29 (Jim Cramer’s Charitable Trust is long . See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Here are the 3 big things we’re watching in the stock market in the week ahead
May 25, 2026
