Market Wavers Amid Conflicting Reports on War

Published as of: May 18, 2026, 9:16 a.m. ET

1. Could "risk-off" favor biggest names? Nvidia hit all-time highs last week as the stock—which has long lagged the broader chip sector—started playing catch up. Ironically, recent strength in the market's largest stocks, including Nvidia and Apple (AAPL), could indicate a more "risk-off" instinct as investors appear cautious about inflation and other bearish elements in the economy. In cases like this, stocks perceived as possible "safe havens" and the dollar tend to outpace smaller, more risky names, though no investment is without risk. Analysts expect Nvidia to deliver "a beat and a raise," meaning to exceed their expectations for the quarter and increase guidance. That's typically been the case with Nvidia, though it had a rare stumble in the year-ago quarter when it missed expectations due to getting locked out of China's chip market. This could mean relatively easy comparisons versus a year ago, though any major jump in results needs to be taken in that context.
    
2. Lower U.S. April surplus a sour note for Treasuries: Though rising oil prices and concerns about the conflict explained much of the yield spike Friday, rising Treasury supplies also played a role. The U.S. government recorded a $215 billion April budget surplus, down 17% from a year earlier in a month where surpluses are common thanks to tax collection, CNBC noted. This points to the government's increasing reliance on borrowing to finance operations, including payments on the growing national debt. When the government needs to borrow, it often puts more notes on the auction block, but recent Treasury auction results have been tepid, suggesting less demand for U.S. assets. There's more competition, for one thing, with yields up in Europe and Japan as central banks consider possible rate hikes. Higher rates abroad pose a fresh challenge for U.S. asset demand, though the dollar climbed Friday in what appeared to be "safe haven" buying. This week doesn't have many Treasury auctions, but Fed minutes Wednesday from its last meeting could feature thoughts from policymakers on demand for U.S. assets and the possible impact on yields.
    
3. Challenges greet Warsh: Kevin Warsh takes over the Fed at an auspicious time with futures trading building in much higher chances of a rate hike at some point this year. The chance rose to nearly 50% today, from less than 1% a month ago, according to the CME FedWatch Tool. The first meeting with Warsh will be in mid-June, and no rate move is expected. No rate cuts are seen over the next year, per the futures market. That's opposite of the last Fed projections, which forecast one cut this year. The projections will be updated next month and become more crucial the longer the war, high oil, and lofty yields remain factors. "We think they'll be on hold for several meetings," said Collin Martin, head of fixed income research and strategy at SCFR. A shift toward rate hikes would be more likely if core inflation excluding food and energy prices continues to increase meaningfully, Martin added. Another factor that could lead to rate hikes is if the labor market starts to improve, perhaps leading to a lower unemployment rate.

• Dominion Energy (D) surged nearly 15% this morning on news of a possible acquisition by NextEra Energy (NEE). Shares of NextEra fell 1.5%. The possible all-stock deal comes amid increasing AI-related power demand, and NextEra is the largest electric power and energy infrastructure provider in North America. The deal would create the world's largest regulated electric utility infrastructure companies, NextEra said in a press release.
   
• Ford (F) climbed another 6% early Monday after last week's rally that followed a positive Morgan Stanley analyst note about the company's attempts to grow its energy storage systems business. Ford's wholly owned subsidiary, Ford Energy, announced the signing of a five-year framework agreement today to provide energy to EDF power solutions.
   
• The chip sector, damaged Friday by possible profit taking in the middle of a historic rally, showed signs of recovery early Monday, though not across the board. Some shares moving up before the open included Taiwan Semiconductor Manufacturing (TSM), Nvidia, ASML (ASML), Advanced Micro Devices (AMD), and Micron (MU). None of the gains were extraordinary, and trading could be volatile ahead of Nvidia's results.
   
• UnitedHealth Group (UNH) fell more than 3% early today. This followed Berkshire Hathaway (BRK.B) reporting it sold shares of UNH during the first quarter, Reuters said. In related news, Macy's (M) rose 3.5% after Berkshire revealed a new position in the stock, and Delta Air Lines (DAL) climbed 2% as Berkshire added shares.
   
• Crypto-related stocks slid early today as bitcoin futures (/BTC) fell 2.3% to the lowest level since May 1. This could reflect risk-off trading extending from Friday, and Bloomberg reported that cryptocurrencies including bitcoin experienced almost $500 million in liquidations of bullish bets during early trading in Asia overnight. This followed new concerns over the weekend about the war possibly heating up, which hurt risk appetite.
   
• Crude oil (/CL) turned slightly lower ahead of the open after Iranian media said the U.S. had proposed a temporary waiver on oil sanctions as part of peace talks, Bloomberg reported. The U.S. hasn't confirmed this report.
   
• Baidu (BIDU) climbed 4.4% this morning. Revenue and profit fell from a year ago as the ad business slowed but results still surpassed Wall Street's estimates, and the Chinese search engine company reported a 49% annual rise in core AI revenue.
   
• The PHLX Semiconductor Index (SOX) went from victory to defeat as the old week ended, falling a sharp 4%. That put it lower for the week, its first weekly decline since March. It's still up nearly 54% from the end of that month, however. And the S&P 500 Index narrowly managed to post a seventh straight weekly gain.