May 20th Pre-Market

Good Morning

Futures are green and oil is pulling back after a few tankers crossed the Strait of Hormuz overnight.

Good to see some relief, but the real test today is Nvidia after the bell. I said yesterday I wanted to see the numbers before trusting the chip bounce and nothing's changed. Everything else today is just the opening act for the earnings after the bell.

Let's dig in...

Today's Big Picture

1. Nvidia's Real Test Tonight Isn't Revenue, It's China 

Wall Street expects $79 billion in revenue and that number is probably already baked in. The real story is Beijing banned Nvidia's China specific RTX 5090D V2 gaming chip last week, closing off another access point to a market KeyBanc values at $14 billion plus.

Huang's comments on China will likely move the stock more than the earnings beat. Options are pricing a $350 billion market cap swing, almost the size of the entire energy sector.

2. Rate Hike Odds Are Accelerating Faster Than Anyone Expected 

Odds of a 50 basis point hike in December tripled in one week, from 4.2 percent to 13.2 percent. A few tankers crossing the Hormuz overnight gave yields a breather but the bond market has been ignoring diplomatic optimism for weeks. Today's 20 year auction and Fed minutes are the next two dominoes. If either one comes in strong, the hike conversation goes from "possible" to "probable."

3. Mortgage Borrowers Are Taking On More Risk Nobody Is Talking About Yet 

ARM loan share hit its highest level since October 2025 as borrowers stretch for lower rates while 30 year fixed rates climb to seven week highs. Total mortgage applications dropped to a five week low.

Retailers like Target and TJX are posting strong numbers but the housing consumer is a different animal entirely.

Market Overview

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Stock Spotlight (pre-market)

Cava $CAVA ( ▲ 3.09% )  

Beat on both revenue and earnings, then raised full-year guidance to $181-191 million (up from $176-184 million). In an environment where most restaurants are guiding flat or cutting expectations, raising guidance signals real growth in a sector starved for it.

Micron Technology $MU ( ▲ 4.76% )  

Rallying on a supply story, not a demand story. Samsung's union starts an 18 day strike tomorrow and memory is already the tightest part of the AI supply chain.

AMC Entertainment $AMC ( ▲ 11.77% )  

Up premarket after CEO Adam Aron bought 250,000 shares. The company has been burning cash and diluting shareholders for years. An insider buy doesn't change the fundamentals but it does give the meme crowd something to run with today.

Marvell Technology $MRVL ( ▲ 5.97% )  

Leading the chip rally as the highest beta AI infrastructure name ahead of Nvidia's print tonight.

VF Corp $VFC ( ▼ 3.17% )  

Beat fourth quarter revenue and the stock is moving on turnaround positioning. Vans has been dead money for two years and any sign of a revenue floor forces short sellers to rethink their thesis.

Analog Devices $ADI ( ▼ 3.93% )  

Beat by 21 cents and the stock is red. When a company beats that cleanly and sells off, it tells you the buy side already owned the good quarter and is using the print to take profit.

What to Watch

IPO’s

MarketBeat did an excellent job on this free IPO guide.

20-Year Bond Auction (1 PM ET) 

Last week's 30-year auction cleared above 5% and pushed stocks down. If today's auction goes badly, yields spike again and that becomes the headline heading into Nvidia earnings. A smooth auction keeps the path clear for a post-earnings rally if Nvidia delivers.

SpaceX IPO Filing (Potentially Today) 

The prospectus for what could be the largest IPO ever at $80 billion plus in funds raised could drop today. If it does, it sets the tone for every late stage private company waiting to go public, including OpenAI and Anthropic. Watch how the deal gets priced relative to the $1.71 trillion valuation target.

EU-U.S. Trade Deal Clears Final Hurdle 

EU lawmakers reached a provisional agreement overnight to ratify the Turnberry trade pact before Trump's July 4 deadline. The deal caps tariffs on most European goods at 15 percent. If this holds, it removes the tail risk of a transatlantic trade war and is quietly positive for European exporters and U.S. multinationals with EU exposure.

- John

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