Markets face a shortened trading week with Memorial Day closing on Monday, but the four-day session promises significant volatility as investors grapple with escalating trade tensions following President Trump's latest tariff threats targeting technology giants and European partners. The S&P 500 ($SPX) (SPY) continues to navigate between strong corporate fundamentals and mounting geopolitical uncertainties, with this week's combination of critical earnings reports, key economic data, and policy developments creating potential for significant market moves across multiple sectors.

Here are 5 things to watch this week in the Market.

Escalating Tariff Tensions

President Trump's Friday threat of a 25% tariff on Apple if it doesn't manufacture iPhones domestically by year-end, along with similar warnings to Samsung and other handset makers, represents an escalation in trade policy that could reshape the technology sector. The additional announcement of hiking EU tariffs to 50% by June 1 due to stalled trade negotiations creates a two-front challenge for markets to digest. Apple (AAPL) and other technology hardware companies face potential supply chain disruptions and margin pressure, while the broader implications for global trade relationships could impact multinational corporations across industries. The June deadline for smartphone manufacturers creates an immediate timeline for market reaction, while the EU tariff increase threatens to disrupt transatlantic commerce. Semiconductor companies, contract manufacturers, and any firms with significant overseas production or European exposure could see heightened volatility as investors reassess business models and profitability under these potential new trade structures.

NVIDIA Earnings Spotlight

Wednesday's after-market earnings from NVIDIA (NVDA) represents the week's most consequential single corporate event, with implications extending far beyond the company itself. As the primary beneficiary of AI infrastructure spending, NVIDIA's results and guidance will provide crucial insights into the sustainability of artificial intelligence investment trends that have driven much of the market's recent performance. Given the stock's massive market capitalization and influence on technology sector sentiment, the report could trigger significant moves across semiconductor and technology indices. Investors will scrutinize data center revenue growth, gaming segment performance, and most critically, management's outlook for AI chip demand amid evolving geopolitical constraints. The timing coincides with the FOMC meeting minutes release at 2pm the same day, creating potential for amplified market reactions if both events align to either reinforce or contradict current market narratives about growth and monetary policy.

Economic Growth and Inflation Picture

This week delivers critical updates on both economic growth momentum and inflation trends with Thursday's Q1 GDP revision at 8:30am followed by Friday's Core PCE Price Index at 8:30am. The GDP data will help confirm whether first-quarter growth met expectations, while the PCE report provides the Fed's preferred inflation measure ahead of future policy decisions. Tuesday's Durable Goods Orders at 8:30am will offer additional perspective on business investment spending and manufacturing activity. These reports collectively paint a picture of economic health at a time when trade policy uncertainties could begin impacting business confidence and spending decisions. The PCE data takes on particular importance as markets continue to assess the Fed's policy trajectory, with any deviation from expected inflation trends potentially influencing interest rate expectations and subsequently impacting rate-sensitive sectors including technology, utilities, and financials.

Technology Earnings Wave

Beyond NVIDIA's headline report, this week brings earnings from several other significant technology companies that will help complete the sector's quarterly picture. PDD Holdings (PDD) reports Tuesday, offering insights into Chinese e-commerce trends amid ongoing trade tensions. Wednesday features Salesforce (CRM), providing perspective on enterprise software spending and cloud adoption rates. Thursday brings results from Dell (DELL) and Marvell Technology (MRVL), offering additional viewpoints on hardware demand and semiconductor trends. These reports will be particularly scrutinized for any commentary on supply chain impacts from potential tariff changes and how companies are positioning for evolving trade policies. Management guidance and strategic commentary could influence investor sentiment toward the broader technology sector's ability to navigate the changing geopolitical landscape.

Consumer Confidence and Fed Policy

Tuesday's Conference Board Consumer Confidence report at 10am will provide timely insights into household sentiment amid escalating trade tensions and ongoing inflation concerns. This reading takes on added importance following recent tariff announcements that could impact consumer prices and purchasing decisions. The report's details on purchasing plans and economic outlook will help gauge whether consumers remain resilient enough to support continued economic growth. Wednesday's FOMC Meeting Minutes at 2pm will offer deeper insights into Fed officials' recent policy discussions and their assessment of economic conditions. With both consumer spending and monetary policy serving as critical market drivers, these releases could influence sector rotation strategies and provide context for interpreting other economic data throughout the week. The combination helps investors assess whether the economic foundation remains solid enough to weather potential trade-related disruptions.

Best of luck this week and don't forget to check out my daily options article.