The week ahead will be all about the weekend that was. On Saturday, longtime Berkshire Hathaway (BRK-B, BRK-A) CEO Warren Buffett said he plans to recommend to the company's board that Greg Abel take over at the end of the year. Abel was named Buffett's successor in 2021.
The announcement came at the end of another annual meeting that saw Buffett warn on Trump's expansive tariff plans and talk down this year's market volatility, among other things. As for where this leaves Buffett and Berkshire, Buffett said he has no plans to sell Berkshire stock as a result of the change and won't be far away if needed. "I would still hang around, and could conceivably be useful in a few cases, but the final word would be what Greg said, in operations, in capital deployment, whatever it might be," Buffett said.
Berkshire Hathaway stock slipped early Monday morning after closing on Friday at a record high. Shares have gained over 17% this year versus a 3% drop for the S&P 500 (^GSPC). How investors react to this weekend's news will likely shape the market discussion in the week ahead.
But given Berkshire is the seventh-largest company in the S&P 500 with a market cap north of $1.1 trillion, how the stock trades could influence the broader market too. A streak on the line Stocks wrapped up last week on a high note, with the S&P 500 marking its longest winning streak since November 2004 as the index erased all of its post-"Liberation Day" losses, bolstered by a solid April jobs report and fresh optimism around US-China trade talks. The Dow Jones Industrial Average (^DJI) also rose 3% on the week, and the tech-heavy Nasdaq Composite (^IXIC) gained 3.4%.
This market rally and investor optimism will be tested by the Federal Reserve. The central bank will announce its latest policy decision on Wednesday, and while no changes are expected, how Fed Chair Jerome Powell outlines the Fed's thinking in the face of a shifting outlook will be the week's key economic event. Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments The weekly update on jobless claims on Thursday and activity checks from the manufacturing sector on Monday will also feature on the calendar.
Earnings season remains busy, with results from Ford (F), Palantir (PLTR), Disney (DIS), and AMD (AMD) among the most notable set for release. So far this earnings season, analysts have lowered second quarter EPS estimates for S&P 500 companies by 2.4% — a larger-than-usual reduction as companies weigh concerns over tariffs and a potential economic slowdown, according to FactSet.
