Here are the 3 big things we're watching in the stock market in the week ahead

Wall Street may have a holiday-shortened trading week. But four days are packed with updates on some of the market's biggest debates: Is AI eating software? Is the American consumer okay? So what's going on with inflation? Let's get into it. 1. Earnings: Salesforce reports Wednesday night. Unfortunately, the stock hasn't become less of a battleground since its last earnings report in late February. As Bank of America's stock sell call last week showed, fears that AI will disrupt its business are alive and well. The stock market chart also shows this. The reality is that Salesforce won't be able to stave off these existential concerns with a single strong earnings report on Wednesday. But a journey of thousands of miles begins with a single step, and Jim Cramer said we're ready to give CEO Marc Benioff a chance to make progress. So what does a step in the right direction look like? It's kicking off with strong revenue growth for Agentforce, a platform for building AI agents that can take action with limited human intervention. In February, Agentforce was generating $800 million in annual revenue; this accounted for approximately 2% of total revenue and more than 29,000 deals had been closed since its launch. Where are these numbers now? The reaction to Workday's quarter on Friday suggests the market may be celebrating a good software quarter. At the same time, investors are also concerned about slowing growth in Salesforce's legacy business, which relies on seat-based licenses. Salesforcce will therefore need to demonstrate adequate performance on other metrics, particularly the current remaining performance obligation (cRPO), which measures contracted revenue expected to occur over the next 12 months. Last quarter's 9% organic growth in cRPO was a slight disappointment. Its forecast for the April quarter was also 9% organically, or 13% overall when including the 4% benefit from the Informatica acquisition. Operating margins will be another indicator of the company's overall health; The FactSet consensus is at 33.4%, implying 1.2 percent annual growth. One more thing to mention: Salesforce is introducing new reporting segments with this release, increasing from five to two. For now, it will present numbers in both new and old formats, but analysts may ask management to explain its reasoning for the earnings release. This was also the case last week when Nvidia made changes to its segment structure. Here are the Street's expectations, based on estimates compiled by LSEG: Revenue: $11.05 billion EPS: $3.12 Costco's quarterly results will be released Thursday night. The company publishes sales figures monthly, so the top line is not the focus when reporting. Instead, it's all about what management should share during the call about margins, earnings, membership renewal trends, same-store sales, and any changes in consumer shopping trends. The US renewal rate in particular is something to keep an eye on, as it has dropped in recent quarters as the company has pivoted to online registrations, resulting in a younger trend. The problem is that people who renew digitally are at a lower rate than people who sign up in store. Costco has taken steps to increase retention, such as targeted marketing, and we want proof that it's paying off. High oil prices put pressure on consumers, but Costco is unique in that it can dynamically drive traffic to its locations because the company often offers the lowest price for gas in their area. While Costco's membership model already helps drive loyalty, its bulk sales strategy ensures these members get the best value in town. Especially in periods when gasoline prices rise, people search for value with increasing energy. As analysts at JPMorgan noted in a note last month, "Whenever gas is up, [Costco] membership is more appealing, and so is credit card (5%/4% cash back)." Of course, if you're already heading to the Costco parking lot to fill up, you can also stock up on some pantry and groceries while you see what other deals there might be. Of course, rising fuel prices could squeeze Costco's profit margins, but that's a dynamic understood on Wall Street. Tax rebates probably provided some benefit this quarter, so we'll be interested to hear about it. After all, the harder the consumer pushes, the more value he'll seek. Costco's membership model and bulk sales strategy, few can beat it in terms of value: Revenue: $69.73 billion EPS: $4.93 2. Economic data: Much of investors' attention will be on Thursday's personal spending and income report, which includes the personal consumption expenditures (PCE) price index. Economists expect a 3.8 percent year-over-year increase as of Friday, with oil prices expected to rise around $100 a barrel, with a 3.3 percent increase expected now. The question is: Can we at least avoid a hike? In response, the Fed is in a tough spot because these inflationary signals suggest it should hold interest rates, if not raise them, to prevent inflation from spiraling out of control once again. Given that inflation was already above the Fed's 2% target before the war, and a post-pandemic inflation surge is still in the near future, the Fed's predicament: Given that consumer spending accounts for roughly two-thirds of the U.S. gross domestic product, the consumer could potentially A slowing economy calls for a rate cut, but rising inflation traditionally requires a rise. However, the dynamic means a quarter-point increase is 41% likely, according to the CME FedWatch Tool, and the odds of two increases are 15%. Next week's hot inflation report will increase the likelihood of a rise even further - not the investors on Wall Street who want anything more than to see some relief in mortgage rates and oil prices. and the most important thing for Main Street is to see the Strait of Hormuz This singular event could be the catalyst needed for oil to move lower again and bond yields to follow, and the good news is that Warsh vowed to cut rates on Friday, as President Donald Trump said this weekend that talks with Iran were progressing in a "constructive" manner, resulting in oil prices falling on Monday (commodities are trading despite the US stock market being closed for Memorial Day). It will help us better understand the starting point before the war with Iran (technically the war was ongoing in March, the last month of the first quarter, but the effects in April and now May are more pronounced.) In the Club, we would like to say that the weight of housing in the economy thanks to all the other purchases that come with appliances, furniture, etc. More inventory or signs of increased affordability would be welcome. Unfortunately, the Club stock most tied to the housing market won't help much, Home Depot, until housing sales pick up. Banks are bringing executives and customers for Q&As and presentations. Boeing, Johnson & Johnson, GE Vernova and Wells Fargo are scheduled to appear on stage on Wednesday, according to the conference's website. Eli Lilly and Starbucks are scheduled to be there on Thursday. Questions asked by analysts during the Q&A could signal what kind of discussions and conversations they are having with customers. Closed at ET Before the bell: Elbit Systems (ESLT), AutoZone (AZO) After the bell: ZScalers (ZS), Chemical & Mining (SQM), BOX. (BOX) Wednesday, May 27 Bernstein Strategic Decisions Conference Before the bell: Bath & Body Works (BBWI), Bank of Nova Scotia (BNS), Capri Holdings (CPRI), Dick's Sporting Goods (DKS), Pinduoduo (PDD), Abercrombie & Fitch (ANF), Bank of Montreal (BMO), Dycom (DY) After the bell: Salesforce (CRM), Marvell (MRVL), Snowflake (SNOW), HP (HPQ), Synopsys (SNPS) Thursday, May 28 Bernstein Strategic Decisions Conference Personal consumption expenditures (PCE) index at 8:30 a.m. ET First unemployment claims at 8:30 a.m. ET Second reading on Q1 GDP at 8:30 a.m. New home sales at 10am ET Before bell: Best Buy (BBY), Hormel Foods (HRL), Canadian Imperial Bank (CM), Kohl's (KSS), XPeng (XPDV), Burlington (BURL), Royal Bank of Canada (RY) After bell: Costco (COST), Dell Technologies (DELL), UiPath (PATH), MongoDB (MDB), Autodesk (ADSK), SentinelOne (S), Okta (OKTA), Gap (GAP), NetApp (NTAP), American Eagle Outfitters (AEO) Friday, May 29 (Jim Cramer's Charitable Trust is long) See here for a full list of stocks.) 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