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Quiet Start. Loud Finish.
PCE Friday Is Everything.
Next week is holiday-shortened — US markets are closed Monday for Memorial Day — but it builds to arguably the most important inflation print of the month: Friday's PCE, the Fed's preferred inflation gauge. After hot CPI and even hotter PPI, this is the number that tells us whether the inflation acceleration is real in the metric the Fed actually targets.
Watch Friday.
🇺🇸 US Markets CLOSED — Memorial Day
Thin global liquidity. Watch for Iran/oil headlines over the long weekend with no US cash market to absorb them.
Consumer Confidence · Case-Shiller home prices
First read on whether the consumer is cracking under high fuel costs — directly relevant after Walmart's margin warning.
Earnings: Salesforce · Marvell · Snowflake
Light on data. The next test of whether the AI capex story extends beyond Nvidia into software and networking.
Initial jobless claims · Durable goods · Q1 GDP (2nd revision) · New home sales
Claims have been creeping up — another rise reinforces the "labor softening" thread.
⚡ PCE + Core PCEThe Big One
The Fed's preferred inflation gauge. Plus personal income & spending, Chicago PMI, advanced trade balance. Released before the US open — sets the tone for the entire session and the month-end close.
CPI and PPI both ran hot this month. But the Fed doesn't target CPI — it targets PCE. This is the number that actually drives policy.
The "rate hike back on the table" narrative hardens. Yields likely push back toward their highs. The pressure on growth stocks returns.
Gives the Fed room to keep a steady hand. PCE often runs below CPI due to methodology — the relief rally in yields could extend.
Either way, this print sets the macro tone going into June's FOMC. Everything the bond market has been screaming about gets confirmed or softened Friday morning.
Markets will continue parsing every Fed signal after the recent hawkish repricing in rates. Traders are watching closely for:
- Any remarks from Fed officials following the hotter CPI/PPI data
- Whether policymakers maintain the "higher for longer" tone seen in recent minutes
- How the Fed balances sticky inflation against signs of slowing growth and softer labor data
With yields still near cycle highs — and a new Fed Chair widely reported to be stepping in — even small shifts in tone could move markets sharply.
- Iran / Hormuz — Wednesday's "final stages" optimism got muddied by the uranium directive. A long US weekend with no cash market means any escalation or breakthrough hits a thin, jumpy tape Tuesday.
- The rotation — does last Thursday's tech-to-value handoff continue, or do the Mag 7 reclaim leadership? Wednesday's software earnings (Salesforce, Snowflake) are a key tell.
- Yields — the 10-year backed off its 4.7% high to the mid-4.6s. Friday's PCE decides whether that pullback extends or reverses.
Next week is a tale of two halves. Monday-Wednesday is quiet — a holiday, light data, some earnings. Then it front-loads everything into Thursday-Friday, culminating in the PCE print that either confirms or calms the inflation story that's driven this entire month. After a week where yields hit 19-year highs, Nvidia delivered, and the market rotated — Friday's PCE is the referee.
"Quiet start. Loud finish. Watch Friday."
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