Nvidia delivers a $42 billion quarter, Target snaps its slump, and a Fed minutes leak puts a rate hike back on the table heading into a $4.56 holiday weekend

By Perplexity

Two giant earnings reports landed on the same evening and pointed in opposite directions for the American consumer. Nvidia booked $81.62 billion in revenue and authorized $80 billion in buybacks while telling investors it has "largely conceded" China. Target — the company most associated with the consumer slowdown of the past four years — finally snapped a five-quarter streak of falling same-store sales.

In between, the Federal Reserve released minutes that broke a single, unmistakable way: the next move may be a rate hike, not a cut. That is the backdrop heading into a Memorial Day weekend with the national gas average at $4.56, a GasBuddy summer forecast at $4.80, and a White House that came within an hour of striking Iran on Monday.

Five stories, one consumer through-line — and almost all of it traces back to a strait of water 7,000 miles away that no American driver, homeowner or shopper has ever seen.

Nvidia books an $81.6 billion quarter, then walks away from China

Nvidia's first-quarter results, posted after Wednesday's close, came in big enough to reset the market's mental math on artificial-intelligence demand. Revenue rose 85 percent year over year to $81.62 billion, with net income of $42.96 billion and earnings of $0.76 per share, according to CNBC's live coverage of the report. Gross margin held at 75 percent. Free cash flow reached $48.6 billion in a single quarter. Data center revenue alone hit $75.2 billion, doubling from a year earlier and accounting for 92 percent of sales. Edge computing — the bucket that now houses gaming, PCs and robotics — added another $6.4 billion.

Guidance was the part that moved the stock. The company told investors to expect $91 billion in revenue for the current quarter, well above the $86.7 billion analyst consensus, while explicitly stating it does not anticipate any data-center compute revenue from China in that outlook, CNBC reported. The board authorized $80 billion in share repurchases and raised the cash dividend to 25 cents from a single penny.

Chief Executive Jensen Huang used the post-earnings interview to make the China abandonment official. "Huawei is extremely robust. They have experienced a record year, and they are likely to have an exceptional year ahead. Their local ecosystem of chip manufacturers is thriving, especially since we have withdrawn from that market," Huang told CNBC's Sara Eisen. "We have effectively conceded that market to them." Huang said Nvidia has been engaged in China for 30 years, that the company would "be thrilled to serve that market" again, and that he has "advised all our analysts and investors to anticipate nothing" from there for now.

The retail-investor read on Nvidia matters because the stock is now a household holding. Nvidia sits at roughly a $5.5 trillion market value, according to The New York Times, and is the largest position in many index funds owned through 401(k)s. A blowout from Nvidia is, in 2026, a wealth-effect event for tens of millions of American households.

Target snaps a five-quarter losing streak

Target landed on the opposite end of the earnings calendar — and the consumer story — with a quarter that genuinely surprised Wall Street. Same-store sales rose 5.6 percent, the first positive comparable result in five quarters, CNBC reported. In-store and online traffic each rose 4.4 percent. Digital comparable sales jumped 8.9 percent, lifted by same-day delivery through the Target Circle 360 membership. Non-merchandise revenue surged nearly 25 percent on membership and the Target+ marketplace. Merchandise revenue of $24.89 billion was the largest the company has reported since November 2021.

Reported earnings came in at $781 million, or $1.71 per share, down from $1 billion and $2.27 a year ago. But the magnitude of the same-store turn was the headline, and management raised full-year sales guidance to 4 percent growth from 2 percent and said earnings per share would land at the upper end of its previous $7.50-to-$8 range, per CNBC.

CEO Michael Fiddelke, who took the top job last fall, struck a careful tone. "While we are encouraged by this initial progress, we recognize that our efforts are just beginning, and we are confident we are headed in the right direction because customers are responding positively in areas where we are focusing and implementing changes," he said on the earnings call as reported by CNBC. Fiddelke also told investors, "We observe a consumer base that remains resilient, despite encountering a blend of challenges and advantages in the first quarter," and added: "We will not mistake this progress for potential."

On tariffs, Chief Financial Officer Jim Lee told the same call that Target is "working through process" applying for tariff refunds and that "it is still too early to assess how policy changes are influencing margins." The company opened seven new stores in the quarter, has more than 100 remodels underway and is rolling out Target Beauty Studio to more than 600 stores. Capital spending for the year is projected at about $5 billion, up more than $1 billion.

Fed minutes leak the word everyone was waiting for: hike

Hours before the two big earnings prints landed Wednesday, the Federal Reserve released the minutes of its April 28-29 meeting — Jerome Powell's final session as chair — and the document made an unmistakable shift. A majority of officials embraced the possibility of higher rates as their next move, The New York Times reported. The minutes said keeping "policy firm would likely [be] appropriate if [inflation were] to continue [to] run persist[ently] above [the 2] percent" target, language the Times reproduced from the document.

The April meeting had already been the most divided FOMC vote since October 1992, with four dissenters splitting an 8-4 hold on the 3.5-to-3.75 percent funds-rate range, as CNBC noted. Three policymakers — Cleveland's Beth Hammack, Minneapolis's Neel Kashkari and Dallas's Lorie Logan — dissented against the "easing bias" in the policy statement, arguing for "a clearer indication that the next action could just as easily be a rate hike as a rate cut," the Times wrote. Governor Stephen Miran dissented in the other direction, in favor of a quarter-point cut.

The minutes confirmed what the bond market began pricing on Tuesday, when the 30-year Treasury yield touched 5.197 percent — its highest since July 2007 — and the 10-year hit 4.687 percent, the most since January 2025, CNBC reported. Yields backed off Wednesday — the 30-year to about 5.116 percent and the 10-year to 4.576 percent — but the directional shift is clear. "At the start of this year, everyone anticipated that rates would decline — that was part of the optimistic outlook. Now, it appears we are heading towards a rate increase," Lacamp, a senior vice president at Morgan Wealth Management, told CNBC. A separate Bank of America survey released the same day found that 62 percent of global fund managers now expect the 30-year yield to reach 6 percent — a level last seen in late 1999.

For consumers, the FOMC pivot lands directly on mortgages and credit. The 30-year fixed mortgage averaged 6.58 percent on Wednesday and 15-year fixed loans averaged 5.94 percent, the Wall Street Journal's Bankrate dashboard showed. Fannie Mae now expects rates to stay above 6 percent through year-end, having forecast 5-handle rates as recently as winter. April inflation came in at 3.8 percent, the highest reading since early 2023, the Journal noted — and the data is what the Fed's dissenters keep pointing at.

Memorial Day weekend opens at $4.56 a gallon — and GasBuddy sees $4.80 by September

By the time Americans pulled into gas stations Wednesday for the Memorial Day getaway, AAA's national average sat at $4.56 a gallon — more than $1.40 above a year earlier and more than 50 percent above where prices stood before the late-February U.S. and Israeli strikes on Iran, CBS News reported. GasBuddy now forecasts an average of $4.80 a gallon for the stretch between Memorial Day and Labor Day, with the all-time high of $5.02 in play if the Strait of Hormuz remains closed deep into summer.

"This is the most volatile summer at the pump in years," GasBuddy's Patrick De Haan said in the same forecast. "Americans are going to pay billions more to get where they're going this summer, and even after the strait reopens, it could take a year or more for prices to fully recover." More than half of Americans now describe gas prices as a financial hardship in CBS's most recent poll, and 77 percent say their income is not keeping up with inflation.

The driving still has not stopped. The Transportation Security Administration is staffing up for what is expected to be one of its busiest weekends of the year, with travel volumes climbing despite the price shock — a pattern motorists, airlines and the Fed are all watching closely. Higher fuel costs, summer-blend refining add-ons of up to 15 cents a gallon and stronger seasonal demand will layer on top of any further crude moves.

Iran negotiations stagger on, and the Senate quietly votes to clip the war powers

The reason a single waterway determines what Americans pay for everything from gas to mortgages is that the war that closed it is still very much active. President Trump told reporters at the White House on Tuesday that he had been "an hour away" from ordering a fresh round of strikes on Iran before pulling back at the request of Gulf allies, CBS News reported. "I tell you what, when we explain it to people, I don't really have enough time to explain to people," he said of the war's domestic support. "I'm too busy getting it done."

The same day, the Senate took a step it had failed to take seven prior times in this war: it voted 50-47 to discharge a war-powers resolution from committee. Four Republicans — Susan Collins of Maine, Lisa Murkowski of Alaska, Rand Paul of Kentucky and Bill Cassidy of Louisiana — joined Democrats, CBS reported in the same live blog. It was the first time Cassidy supported advancing such a resolution, and it came just days after he failed to make a runoff in the Louisiana GOP Senate primary against a Trump-endorsed opponent.

Treasury Secretary Scott Bessent, meanwhile, used a G7 finance ministers' "No Money for Terror" conference in Paris on Tuesday to launch what the administration is calling Operation Economic Fury — a coordinated push to "expose shell and front companies, close bank branches, and dismantle proxies" supporting Iran, The New York Times reported. The State Department on Tuesday sanctioned 19 vessels and several Iranian currency-exchange houses, per CBS. Vice President JD Vance, asked at the White House whether he believes Tehran will actually sign a deal, replied: "I will not say with confidence that we're going to reach a deal until we're actually signing a negotiated settlement here."

The bigger picture

Strip out the noise and Thursday morning's American consumer is being pulled in five directions at once by the same currents. Nvidia's blowout — and its retreat from China — confirms that the artificial-intelligence build-out is still the single most important wealth event in the equity portfolios that fund retirements, college tuition and down payments. Target's surprise turnaround says the discount-and-discretionary shopper is not done, even with gas at $4.56. The Fed's minutes say that resilience is precisely what could prompt the next move on rates to be a hike, not a cut — pushing the 30-year mortgage further from where buyers wanted it and the 30-year Treasury closer to a level not seen since the Clinton administration. The Memorial Day weekend opens with the highest pump prices for the holiday since 2022, with the summer top end at $5.02 if the Strait of Hormuz stays closed. And the war that closed the strait is still on a three-day clock that the president himself could restart at any moment.

For Jim Hood's readers, the takeaway is unusually clean: the AI boom is real, the consumer is more resilient than the headlines suggest, but the cost of money and the cost of a tank of gas are both heading the wrong way for everyone trying to refinance, buy a house, or simply get to the lake this weekend. The Fed's next decision and a Friday-to-Sunday window in the Persian Gulf will probably matter more to the household budget than anything either Nvidia or Target reported.