In the world of finance, last week was marked by cautious optimism as economic data revealed both positive and negative trends. The Consumer Price Index (CPI) and Retail Sales for April came in worse than expected, indicating a slowing consumer spending and cooling inflation. However, this news brought some relief to the markets as it suggested that key inflation indicators were moving in line with the target rates set by the Federal Reserve.

The Consumer Price Index reported a 0.3% month-on-month increase in April, slightly lower than the expected 0.4% increase. This indicated that prices were starting to cool down compared to the previous month's 0.4% uptick. Similarly, Retail Sales for April remained flat, falling short of the expected 0.4% rise on top of the 0.6% increase seen in March. This decline in sales further pointed towards a slowdown in consumer spending due to higher inflation.

The stock market reacted positively to these developments, with the S&P 500, DJIA, and Nasdaq Composite reaching new closing highs. The Dow even briefly crossed the threshold of 40,000 points on Thursday.

Earnings reports from retailers also portrayed a mixed picture of the industry's health. Home Depot, a major home improvement retailer, surpassed expectations in terms of bottom-line earnings but fell short on revenue projections. The company attributed this to consumers delaying home projects due to high interest rates.

On the other hand, Walmart, a big winner during the high inflation period, reported better-than-expected results for both earnings and revenues. The retail giant continued to attract a larger share of high-income shoppers who were trading down in the current economic environment.

However, Under Armour had a less optimistic earnings report. Sales in its largest market, North America, fell by 10%, and the company expects further challenges ahead. To tackle these setbacks, Under Armour announced a board restructuring plan as well as job cuts.

Overall, with 93% of S&P 500 companies having reported for the first quarter of 2024, the earnings per share growth has settled at 5.7%, the highest rate seen in almost two years.

Looking ahead, Nvidia, the last of the Fab Four tech giants, is set to report its first-quarter earnings. Analysts are estimating a year-on-year earnings growth of 412% and revenue growth of 241%. The company's performance will be closely monitored as expectations are already high in light of recent AI advancements made by other players such as OpenAI and Alphabet.

Several retailers are also slated to release their earnings reports this week, including Lowe's, Macy's, TJX Companies, Target, and Ross Stores.

The first-quarter earnings season is gradually coming to a close, with 83% of companies having reported so far out of a universe of over 11,000 global names.

While economic data has shown signs of improvement, investors and analysts remain cautious, keeping a close eye on company performance, inflation trends, and the possibility of rate cuts by the Federal Reserve.