U.S. stocks ended the week on a quiet note on Friday to cap a losing week, as investors awaited much-anticipated talks between U.S. and China officials on trade and economic issues.
For the week, the Dow Jones Industrial Average fell about 0.2%, the S&P 500 dipped around 0.5%, while the tech-heavy Nasdaq Composite shed roughly 0.3%.
U.S. Stocks Chart Performance
Source: Investing.com
More volatility could be in store this week as investors continue to assess the outlook for the economy, inflation, interest rates and corporate earnings amid President Donald Trump’s trade war.
On the economic calendar, most important will be Tuesday’s U.S. consumer price inflation report, which is forecast to show headline annual CPI rising 2.4% year-over-year in April. The CPI data will be accompanied by the release of the latest retail sales figures as well as a report on producer prices, will help fill out the inflation picture.
Weekly Economic Events
Source: Investing.com
That will be accompanied by a heavy slate of Fed speakers, including Chairman Jerome Powell. Interest rate futures suggest traders see an 85% chance that the Fed will keep rates unchanged at its June meeting, according to the Investing.com Fed Monitor Tool.
Meanwhile, the reporting season’s last big week sees earnings roll in from notable companies such as Walmart (NYSE:WMT), Cisco (NASDAQ:CSCO), CoreWeave (NASDAQ:CRWV), Applied Materials (NASDAQ:AMAT), Deere (NYSE:DE), and Alibaba (NYSE:BABA).
Regardless of which direction the market goes, below I highlight one stock likely to be in demand and another which could see fresh downside. Remember though, my timeframe is just for the week ahead, Monday, May 12 - Friday, May 16.
Stock To Buy: Alibaba
Alibaba is shaping up as a compelling turnaround story, making it a stock to buy this week. The Chinese e-commerce and cloud computing giant appears positioned for a positive surprise when it reports its March-ended quarter results before the market opens on Thursday at 5:35AM ET.
Recent optimism has been evident, with profit estimates revised upward ten times in the weeks leading up to the report—compared to only three downward revisions, according to InvestingPro. Market participants foresee a possible implied move of 5.9% in either direction after the print drops.
Alibaba Earnings Forecast
Source: InvestingPro
Consensus calls for Alibaba to report a robust 24% increase in adjusted profit, reaching ¥12.81 ($1.73) per share. This would mark the second consecutive quarter of accelerating earnings growth, a strong signal of improving fundamentals.
Revenue is projected to climb 8% year-over-year to ¥240 billion ($32.9 billion), up from 5% growth in the prior quarter, reflecting momentum in its core businesses. A key driver of this momentum is Alibaba’s cloud business, where AI-related product revenue has grown by triple digits for six straight quarters.
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Looking ahead, the Chinese tech titan looks poised to deliver strong forward-looking guidance as AI applications continue to expand across various industries. In late January, Alibaba unveiled an AI model that it claims outperforms rival DeepSeek’s models and rivals top-tier global models, positioning the company as a serious contender in the AI race.
Besides earnings, Alibaba could also get a boost as market sentiment shows a positive response to recent progress on trade talks between Washington and Beijing.
Alibaba Chart
Source: Investing.com
Despite a recent dip below its 50-day moving average, Alibaba's stock has surged 47.8% year-to-date, indicating strong investor confidence. Shares – which have staged an impressive rally off their April 9 low of $95.73 - closed at $125.33 on Friday.
It is worth mentioning that Alibaba stands out with a "GREAT" financial health label and an overall score of 3.11, as per the quantitative models in InvestingPro, showing robust fundamentals and strong profit capability alongside healthy cash flow.
Walmart, on the other hand, faces a more challenging near-term outlook as it prepares to announce its first-quarter earnings on Thursday morning at 6:55AM ET. Analysts expect lackluster results, citing a less favorable product mix, rising expenses, and changing consumer behavior.
An InvestingPro survey of analyst earnings revisions points to growing pessimism, with all 24 of the analysts covering WMT cutting their profit estimates ahead of the print. Options trading suggests a 6% move in Walmart’s share price post-earnings, higher than the typical implied volatility, reflecting market uncertainty.
Walmart Earnings Forecast
Source: InvestingPro
Wall Street expects the retail giant to report a 3.3% decline in earnings per share to $0.58, alongside revenue of $164.5 billion.
With macroeconomic pressures like inflation and shifting consumer spending patterns adding headwinds, Walmart’s near-term upside appears limited. Investors may want to trim exposure ahead of the earnings report and reassess after clarity emerges on the company’s outlook.
While management is likely to reaffirm full-year guidance, the retail behemoth has already flagged a wider range of outcomes for Q1 operating income, signaling potential volatility.
Given these potential pressures on profitability and the cautious signals, Walmart may be a stock to approach with caution this week.
Walmart Chart
Source: Investing.com
Shares – which are up 7% in 2025 - ended Friday’s session at $96.72. With a market cap of roughly $774 billion, Walmart is the world’s most valuable brick-and-mortar retailer and the 10th largest company trading on the U.S. stock exchange.
Be aware that Walmart remains extremely overvalued as per the Fair Value models on InvestingPro, which point to a potential downside of -26% to about $72/share.
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Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Invesco Top QQQ ETF (QBIG), and Invesco S&P 500 Equal Weight ETF (RSP).
I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies' financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.
