Sell in May Back? Walsh Tooks Fed, NVDA Reports Tomorrow: Add or Trim?
Monday: $SanDisk Corp.(SNDK)$ -8%, $NEBIUS(NBIS)$ -11%, $Lumentum(LITE)$ -9.3%, $Corning(GLW)$ -8.1% — AI photonics and storage getting hit. $NVDA$ pulled back from the $235 high to $222.32, extending lower pre-market to $220.98. Three variables are hanging over the market simultaneously this week: the Sell in May narrative is playing out, a new Fed chair just took office, and NVDA reports tomorrow night.
What is Monday's selloff telling us?
May is structurally a high-pressure month — end-of-quarter repositioning, late earnings season, summer liquidity compression. The "Sell in May" narrative tends to self-fulfill. But index-level support remains intact — Morgan Stanley just raised its 12-month SPX target to 8,300 (bull case 9,400). The selling is in high-beta names, not the broader fundamental picture.
How will market move when new Fed chair takes over?
Powell officially stepped down May 15. Kevin Walsh was sworn in, confirmed 54-45 by the Senate.
New chairs tend to run calmer-than-expected first months — they typically maintain the prior framework to avoid spooking markets. The real volatility arrives 3-6 months later as new policy frameworks begin to materially land.
Walsh's key departures from the Bernanke-Yellen-Powell playbook?
- Ending "over-communication": Scrapping 15 years of forward guidance. Risk assets will become far more sensitive to each data release and FOMC meeting
- New inflation framework: Adopting the "trimmed mean PCE" (cutting bottom 24% + top 31% of weights) — currently reads significantly below core PCE given tariff-driven commodity shocks. Builds the narrative for rate cuts
- AI productivity cover: Argues AI efficiency gains justify easing long-term — directionally market-friendly
NVDA earnings tomorrow: market pullback is waiting for a chance
$NVDA$ at $222, reporting May 20 after-hours. Latest bank targets:
Consensus Q1 revenue estimate: $80B (vs Street $78.3-78.6B, about +2% above). Citi projects FY27 AI GPU revenue $284B (+79% YoY). Goldman's FY28 EPS is 34% above Street consensus.
9 of the past 12 quarters, NVDA beat by over $1 billion.
Goldman's caveat: TSMC and SK Hynix supply chain data have already pre-loaded expectations. "The bar for outperformance is relatively high." With Walsh removing Fed certainty and Sell in May flows at work, any "sell the news" interpretation will get amplified.
How are you positioned this week?
Sell in May signals appearing, will you trim ahead of NVDA earnings?
Walsh ending forward guidance means every FOMC meeting becomes a bigger volatility event, how you're sized going into the summer?
If the beat-and-raise lands, do you think the stock rallies or "buy the rumor, sell the news"?
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Adding rocket to the fuel is Kevin Warsh, the new Fed Chair. He takes the wheel at a time where the closure of the Strait of Hormuz has sent energy prices spiralling, resulting in high inflation.
Add or Trim NVIDIA? I vote ADD. Why?
3 reasons:
Blackwell & Rubin Supercycles. Jensen said that NVIDIA has locked in at least USD 1 Trillion in orders for both chips, through to end of 2027.
Big Tech Capex: Hyperscalers are accelerating their AI Capex. NVIDIA is a big beneficiary.
CUDA Moat: This platform is the global industry standard that millions of AI developers use to write code.
Best way to buy NVDA is through Dollar Cost Averaging.
@Tiger_comments @TigerStars @Tiger_SG
On the Fed side, I think the removal of forward guidance under Kevin Walsh increases uncertainty rather than reducing it. I’m staying more selective with sizing and holding some dry powder, since policy-driven volatility could rise through the summer.
For NVDA, I’m still long-term constructive but aware expectations are extremely high. Even a strong beat could see “sell the news” near term, though any pullback would likely be more of an entry opportunity if AI demand guidance stays strong.
@TigerClub @Tiger_comments @TigerStars
The appointment of a new Federal Reserve chair marks a shift from predictable forward guidance, with a Warsh-led Fed likely tolerating more volatility and reducing reliance on the Bernanke-Yellen-Powell playbook, making every economic release and FOMC meeting more market-moving
Sell in May signals are appearing, with summer trading likely choppier as liquidity weakens and positioning fades, while NVIDIA (NVDA) fundamentals remain strong from expected revenue growth and hyperscaler spending, but earnings risk hinges on elevated expectations and a post-earnings dip could provide a chance to rebuild trimmed exposure。。。
A beat-and-raise may deliver limited near-term upside as strong results are already priced in, with “buy the rumor, sell the news” remaining a credible risk
The reality of today's market is built on completely different engines than the past, and there are incredibly solid reasons why a sell in May isn't as likely or not to that extend this year.
For a start, looking at corporate spending, the largest tech hyperscalers have collectively locked in nearly seven hundred billion dollars in infrastructure budgets for this year alone, and roughly three-quarters of that is tied directly to physical AI buildouts. This are massive, contracted physical infrastructure that doesn't just stop because the calendar turned to May.The race to AI supremacy is real.
On top of that, look at the corporate receipts. Earnings season has been remarkably strong, with more than eighty percent of major companies delivering solid beats and upward revisions. Buying the dip is the way to go this round.
Afterall, nothing is certain, the market needs to down so that we can replenish our positions [Happy]
2. Sell in May recommends selling $NVIDIA(NVDA)$ which is a consideration.
3. I have a long position in the market $SPDR S&P 500 ETF Trust(SPY)$ which I will sell
4. $NVIDIA(NVDA)$ may fall in share price this week due to underperformance
Let us see, but hopefully Powell staying on the board helps curtail some of the fallout
The slides now are just blips, the hype is too big and nvidia too well known to have any serious problems... that is until the AI bubble bursts
For NVDA, expectations are extremely high. It’s no longer about beating, but how far they beat and whether guidance extends the AI capex runway.
Base case:
Beat + inline → likely sell-the-news
Beat + strong raise → short rally, then digestion
Exceptional + clear Blackwell upside → squeeze higher
I wouldn’t chase pre-earnings. Risk-reward is asymmetric.
On the Fed, weaker forward guidance means each FOMC becomes a volatility event. That argues for smaller sizing, staggered entries, and keeping dry powder into summer.
Not full “Sell in May”, but definitely not max risk either.