Markets face April CPI test as earnings tide lifts tech to records

Investors head into the week of May 11 facing the April consumer price index and earnings from Circle Internet Group, Nebius Group, and Applied Materials. The reports will test whether the technology-led rally that pushed the S&P 500 to record highs can continue.

The S&P 500 gained 2.3 per cent in the week ending May 8, with the technology sector jumping 7 per cent to lead all groups. The Nasdaq also closed at a record. The index has added more than $3tn in market capitalisation since the start of April, according to Moomoo data.

The April CPI report lands Tuesday at 8:30am Eastern. Deutsche Bank economists forecast headline inflation at 3.81 per cent year on year, up from 3.3 per cent in March. Core CPI, which strips out food and energy, is expected at 2.60 per cent, according to Octagon AI estimates. A print above 3.8 per cent would be the third straight monthly acceleration in headline prices, intensifying the argument inside the Federal Reserve that the easing cycle which began in late 2025 should pause.

No Fed officials are scheduled to speak before the CPI release, though New York Fed President John Williams moderates a discussion on Thursday at 5:45pm Eastern, the first public remarks from a senior official after the data.

Circle Internet Group, the issuer of the USDC stablecoin, reports first-quarter results before the open on Monday. A single analyst tracked by MarketBeat projects earnings of $0.32 per share, down from $0.43 in the fourth quarter of 2025, when Circle beat the $0.25 consensus on revenue of $770.23m. The report lands as stablecoin legislation advances through Congress, with the GENIUS Act clearing the Senate Banking Committee in late April.

Constellation Energy, the nuclear power operator that has repositioned around AI data-centre demand, also reports first-quarter results on Monday.

Nebius Group posts first-quarter results before the open on Wednesday. The Amsterdam-based cloud infrastructure company became one of Europe’s most-watched AI infrastructure names after receiving a $2bn investment from Nvidia. MarketBeat estimates a loss of $0.81 per share on revenue of $375.1m. Nebius closed its $643m acquisition of Eigen AI in February, and analysts are watching for commentary on capacity expansion and the integration timeline. The company confirmed the May 13 date in a press release last month. The stock closed Friday at $191.16, above the average analyst price target of $154.75, a spread that reflects how divided the Street is on a name that has drawn AI-infrastructure bulls and sceptics who question the path to profitability.

Cisco Systems reports fiscal third-quarter results after the close on Wednesday.

Applied Materials reports fiscal second-quarter results after the close on Thursday. The semiconductor equipment maker guided for earnings of $2.44 to $2.84 per share on revenue of $7.2bn to $8.2bn when it reported in February, well above the consensus at the time. The current analyst estimate stands at $2.23 per share on $7.0bn in revenue, with the range spanning $2.17 to $2.26, according to MarketBeat. Shares gained 5.98 per cent on May 8 to close at $435.18 and are up roughly 40 per cent over the past twelve months as AI-chip equipment spending has run ahead of analyst forecasts.

April producer price index data lands Wednesday at 8:30am Eastern. Retail sales, jobless claims, and import and export prices are all due Thursday morning. Industrial production for April rounds out the week on Friday at 9:15am.

What to watch

The CPI print is the week’s main event. A headline number at or below the 3.8 per cent consensus would probably keep the rally intact, particularly if core CPI prints at or under 2.60 per cent. A print above 4 per cent, a level some traders see as plausible given the jump from 2.4 per cent in February to 3.3 per cent in March, would test the thesis that the Fed can look through near-term tariff-driven price pressures.

On the earnings side, Applied Materials is the name with the most direct link to the AI capex cycle. The company’s February guidance was far above consensus, and the stock’s move since then suggests the market is pricing in another raise. Nebius, by contrast, is still proving itself. The Nvidia investment gives it credibility, but a $375m revenue quarter against a loss of $0.81 per share is a reminder that AI infrastructure is capital-intensive before it is profitable.

Circle’s report is the one to watch for the crypto-native audience. USDC circulation has grown to roughly $62bn from $48bn a year ago, per CoinGecko data, and the company’s revenue is closely tied to the yield it earns on the reserve assets backing the stablecoin. With short-term rates still elevated, Circle’s net interest income should remain strong, but the market is watching whether the company can diversify its revenue mix beyond interest on reserves.

Trading volumes are likely to thin out ahead of the CPI release on Tuesday and pick up sharply after the print. Options markets are pricing a roughly 1.2 per cent move in the S&P 500 on the day of the CPI report, according to Goldman Sachs derivatives strategy, above the 0.9 per cent average for CPI days over the past twelve months.

What comes next

The following week brings quarterly results from Nvidia, the company most directly tied to AI infrastructure spending, and existing home sales data for April. How the April CPI print and Nvidia’s guidance on its May 20 call land will determine the direction of equities into June.