On Repeat. A new verse of a familiar song played out in the markets Monday. Consumers are worried and geopolitics are unsettled, but artificial intelligence is enough to power indexes past those anxieties.

The S&P 500 added 0.6% on Tuesday, and the Nasdaq Composite gained 1.2%. Both closed at record highs.

The Conference Board’s consumer confidence index came out today, slipping 0.7 points in May, and coming in at a reading of 93.1. That’s better than expectations of 91.9, but a decline from the upwardly-revised 93.8 from April. Inflation and higher gas prices are dampening the national mood.

As part of its long-standing pattern, though, the markets shrugged off the news. Jeffrey Roach, chief economist for LPL Financial, notes there are silver linings to the latest reading on insecure consumers: “Given the current pricing pressures, we would have expected a more dramatic decline in confidence. However, consumers feel the employment situation will improve by the end of the year. Hence, discretionary spending on items such as travel should increase after the temporary hold on spending.”

Fresh U.S. missile strikes today reversed weekend hopes that the U.S. and Iran were getting closer to a peace deal. But again, that didn’t translate into any real concern on Wall Street. In fact, “the global economy looks to be absorbing the oil shock fairly smoothly,” writes Citi’s Nathan Sheets, who only modestly lowered his 2026 global growth expectations today. “Bottom line, our forecast remains very much in ‘wait and see’ mode. But to date, the emerging evidence has pointed more toward resilience than to sharp slowing.”

Not surprisingly, Sheets cited AI spending as an offset to weakness elsewhere. Semiconductor stocks saw ongoing momentum on Tuesday, up for their fifth straight day, helping the indexes close higher.

The market is also still digesting Nvidia’s earnings report from last week, notes Ameriprise Chief Market Strategist Anthony Saglimbene. “[O]ne of the most important reports of the earnings season confirmed that AI demand is broadening, the product cycle is deepening” and chips are still center stage.

Sounds familiar.

The Hot Stock: Micron Technology +19.3%
The Biggest Loser: AutoZone -9%

Best Sector: Information Technology +1.7%
Worst Sector: Energy -2.8%

Earnings season is finally drawing to a close, but there are still a few notable companies on the docket this week, including one that will give us one last major look at the U.S. consumer: Costco Wholesale.

It’s not the only retailer reporting at the tail end of earnings season (we’ll hear from mall staples Gap, American Eagle and Abercrombie & Fitch too) but Costco is by far the biggest player with some of the highest stakes—shares have already climbed more than 15% year to date.

The company tends to cater to a slightly higher-income demographic that hasn’t been as hard hit by inflation and economic worries. But even higher-income households are focused on value, which could boost Costco’s stock price. When it comes to both overall visits and same-store visits (which measures consumer trips to stores that have been open for 12 months or more), Costco had a better March and April than Walmart or BJ Wholesale Club Holdings, according to data from Placer.ai. With gas prices hovering around $4.50 nationally, discounted fuel has been a major draw for Walmart, as the company noted on its most recent conference call. That’s likely true for Costco as well.

Investors may be concerned given that Costco shares are near record highs. But the company’s technicals look strong, and there’s always a chance that Costco, which sued the Trump administration over tariffs, might “use any tariff recovery as a catalyst for a one-time dividend,” noted Jefferies’ Carey Kaufman.

Regardless of the stock’s performance, the bigger question for markets will be what Costco says about the consumer moving forward. We’ve already seen bullish corporate perspectives from retailers, credit card issuers and hotels; given Costco’s slightly more well-heeled core shoppers, there’s a decent chance it will echo that sentiment.

But as the last major retailer to report results and weigh in on the spike in gas prices, investors will be keen to hear any insights Costco can offer.

Agilent Technologies, Abercrombie & Fitch, Bank of Montreal, Bank of Nova Scotia, Dick’s Sporting Goods, Dycom Industries, Heico, HP Inc., Marvell Technology, Nutanix, PDD Holdings, Salesforce, Snowflake, Synopsys, and U-Haul Holding announce earnings tomorrow.

—Dan Lam

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