Jesse Cohen

Sun, May 18, 2025, 9:38 AM6 min read

• Moody’s U.S. credit downgrade, housing data, and retailer earnings will be in focus this week.

• Snowflake is a buy with strong earnings, upbeat guidance on deck.

• Target’s shrinking revenue, declining profit and weak outlook make it a stock to sell.

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The stock market ended higher on Friday, with the major averages registering sharp gains for the week driven by signs of a de-escalation of the U.S.- China trade war and renewed optimism over AI spending prospects.

For the week, the Dow Jones Industrial Average rose 3.4%, the S&P 500 climbed around 5.3%, while the tech-heavy Nasdaq Composite surged 7.2%. The strong week saw the Dow and S&P wipe out their losses for the year.

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. Late Friday, Moody's downgraded the U.S. credit rating by one notch to ‘Aa1’ from ‘AAA’, citing rising debt and interest payments.

On the economic calendar, flash PMI readings on manufacturing and the services sector will grab attention on Thursday, along with updates on the housing market.

Interest rate futures suggest traders see a more than 90% chance that the Fed will keep rates unchanged at its June meeting, according to the Investing.com Fed Rate Monitor Tool.

Source: Investing.com

Elsewhere, in corporate earnings, results from major retailers such as Home Depot (NYSE:HD), Lowe’s (NYSE:LOW), Target (NYSE:TGT), and TJX Companies (NYSE:TJX) will be the key updates of the week as the reporting season quiets down. Other notable names lined up to report earnings include Palo Alto Networks (NASDAQ:PANW), Snowflake (NYSE:SNOW), Intuit (NASDAQ:INTU), and Baidu (NASDAQ:BIDU).

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 justfor the week ahead, Monday, May 19 - Friday, May 23.

Snowflake, the data analytics and cloud data management software provider, is positioned for a potential positive catalyst when it releases its first-quarter earnings report on Wednesday at 4:05PM ET.

Analyst sentiment has been notably positive heading into the print. According to InvestingPro data, profit estimates have been revised upward 19 times in recent weeks, compared to just ten downward revisions. This favorable revision ratio suggests growing confidence in Snowflake's near-term execution and business momentum.