Energy Costs Lift Inflation, Tech Strength Holds, and Nvidia on Deck - Weekly Market Update

“The secret to investing is to figure out the value of something—and then pay a lot less.” -Joel Greenblatt

Last Week’s Overview

Source: Bloomberg (May 14, 2026)

Weekly Insights

Each week, we break down the key events and market movements shaping the investing landscape. From economic data to investor sentiment and global headlines, this section captures what mattered most, and how it impacted markets.

Inflation Pressures Return as Energy Costs Climb

Wholesale inflation rose 6.0% in April, the largest annual increase since 2022, driven by climbing energy and freight transportation costs. What's notable is that these pressures are now spreading beyond raw commodities into the shipping, warehousing, and supplier prices that affect nearly every business.

This is exactly the kind of environment where the quality of a company matters most. Businesses with strong brands and pricing power can pass costs along to customers and protect their margins, while weaker competitors get squeezed. Our discipline around owning industry leaders is designed for moments like this.

Bond Markets Reset as Rate Cut Expectations Shift

Treasury yields moved meaningfully higher this week, with the 30-year approaching 5% as investors recalibrated expectations for Federal Reserve policy under incoming Chair Kevin Warsh. Markets are increasingly questioning whether persistent inflation will allow the Fed to cut rates as quickly as previously hoped.

While rising yields can pressure existing bond prices in the short term, they may also create more attractive income opportunities for new bond investments. For patient investors, higher yields today may translate to stronger income tomorrow, and any future economic moderation could deliver price gains on top.

Technology Leaders Advance on AI Demand and Trade Progress

Technology and semiconductor stocks rose ahead of high-profile trade discussions between the U.S. and China, featuring executives from Nvidia, Tesla, Qualcomm, and Micron. Markets viewed the talks as a potential easing point for trade tensions around chips and AI infrastructure. Combined with continued strong AI demand, this backdrop reinforces leadership among the largest, highest-quality technology companies that possess the scale to navigate shifting global policies.

Key Drivers of Our Outperformance

We believe in transparency regarding our performance. This section spotlights the companies, sectors, and strategies driving success across our portfolios.

• Top Company: Alphabet Inc.
  Alphabet was our top performer last week with an impressive 13.8% gain, driven by accelerating AI monetization. Google Cloud is growing faster than expected, and enterprise adoption of Gemini AI tools continues to climb, translating into stronger long-term earnings power.
  
  
• Top Sector: Communication Services
  The sector led our performance with broad strength across holdings like Alphabet, Meta, Netflix, Disney, and Spotify. Investors are increasingly viewing AI investment as a long-term advantage rather than a near-term drag.
  
  
• Top Quant Strategy: Size
  
  Our Size strategy was the week's strongest performer. Mega-cap holdings have the balance sheet strength and access to capital required to thrive in an era of massive AI investment that smaller competitors simply cannot match.
  
  

What To Look For Next Week

• Federal Reserve FOMC Meeting Minutes (Wednesday, May 20): Investors are eager for color on how committee members are balancing inflation pressures against slowing consumer sentiment.
  
  
• Nvidia Earnings (Wednesday, May 20, After Market Close): Nvidia has guided for roughly $78 billion in revenue. This report acts as a barometer for the entire AI investment cycle.
  
  
• U.S. Housing Starts and Building Permits (Thursday, May 21): This data will show how builders are responding to higher mortgage rates and provides early signals about broader economic momentum.
  
  
  
  Sources: Bloomberg (May 14, 2026), Optimize Asset Management (May 14, 2026), Board of Governors of the Federal Reserve System (May 14, 2026), Nvidia Investor Relations (May 14, 2026), and the U.S. Census Bureau (May 14, 2026).
  
  

Disclaimer: This report is for informational purposes only and does not constitute investment advice. Please consult with your financial advisor before making any investment decisions.