Next week will test whether the AI rally can hold as fears of rising inflation grow. Stocks have been ripping higher thanks to a revival in enthusiasm around artificial intelligence. Since its March low, the S & P 500 has rallied roughly 19% to top 7,500 this week for the first time ever. Chip stocks, and especially memory, are responsible for that advance. Take note that the Roundhill Memory ETF (DRAM) , which has Micron Technology , SK Hynix and Samsung as its largest holdings, has already ballooned to $10 billion in assets under management, after only launching a little over a month ago. But the stock market has taken off without much participation from its base. Most glaringly absent are the cyclical corners that are most affected by the effects of higher inflation. The S & P 500, which has climbed roughly 3% this month, is about flat on an equal-weight basis. Financials are the worst-performing sector year to date, down more than 6%, while consumer discretionary is only slightly higher on the year. “What we do know is that the rise in energy prices we have already seen is eventually going to have serious consequences for the economy and equities,” François Trahan, chief investment strategist at BMO Capital Markets, wrote this week. “That part might not be completely priced into the major indices.” That raises the stakes for next week, given that Nvidia’s earnings are set to release into a stock market near record highs, alongside a whole spate of retail companies like Walmart that are reporting just as consumer sentiment dives to all-time lows . The divergence between the stock market and weakening consumer sentiment is especially worrisome given that the two measures usually move more in sync. A rising stock market contributes to the “wealth effect,” meaning individuals with growing portfolios can continue to spend and feel optimistic about their future prospects. That overall feeling of financial wellbeing from a rising ticker tape can extend even to those with limited or no exposure to the stock market. But the dismal consumer mood as of late, and the weakness in the markets’ internals, suggests something may need to give, especially with elevated yields and a rising Cboe Volatility Index (VIX) . On Friday, the S & P 500 posted a down day , with the 30-year Treasury yield topping 5.1% for the first time in nearly a year. Nvidia Investor expectations for Nvidia are high heading into the print, given that the consensus is that CEO Jensen Huang will once again deliver a beat and raise. In terms of the stock, the setup is less than ideal. The chipmaker is trading near all-time highs, with its market cap drawing near $6 trillion — a level no company has ever reached before. But B. Riley Wealth’s Art Hogan said that in terms of its valuation, it’s actually attractive at this point. Nvidia is trading at a forward 12-month multiple of around 25, and looks more reasonable than other chip stocks that have recently gone parabolic. What Huang will say in his commentary will matter to AI investors, given that strong results from the GPU-maker will certainly lift other parts of the market including optical stocks such as Lumentum, or other networking companies such as Broadcom, according to Brian Colello, semiconductor analyst at Morningstar. Any disappointment from Nvidia, however, could hurt the AI companies that have skyrocketed over the last month, namely semiconductors. Many investors expect the iShares Semiconductor ETF (SOXX) , which is up 70% this year, is due for a breather after its rally. Retail winners and losers Then there is Main Street. Among the spate of retailers offering insight into the consumer next week are Walmart , Target, Ralph Lauren, and TJX. Their results will show which companies are emerging as the winners as shoppers come under greater pressure. Higher oil prices from the U.S.-Iran war are starting to push prices higher, which could have cost-conscious consumers looking for value. Companies that cater to lower-income Americans, who have borne the brunt of higher fuel costs, will especially be watched for their take on how their customers are faring. Walmart is a likely winner here, as the big-box retailer’s strategy for everyday low prices becomes more appealing in a tight macroeconomic environment. Target, which is already struggling with its own turnaround, could be more challenged. Katie Stockton, founder and managing at Fairlead Strategies, said the stock market could be due for a breather, especially those parts that have rallied recently like semiconductors. However, she said recent breakouts in Nvidia and Apple suggest any near-term pullback could be a buying opportunity. “If [investors are] looking to add exposure to take advantage of the strong momentum behind the market, they’re wise to wait a couple weeks and allow for some digestion of the recent gains,” she said. Week ahead calendar All times ET. Monday, May 18 10:00 a.m. NAHB Housing Market Index (May) Tuesday, May 19 8:15 a.m. ADP Weekly Employment change (05/02) 10:00 a.m. Pending Home Sales (April) Earnings: The Home Depot Wednesday, May 20 2:00 p.m. FOMC Minutes Earnings: Intuit , Nvidia , Nordson , The TJX Cos. , Analog Devices , Target , Lowe’s Companies , Hasbro , Raymond James Financial , Progressive Thursday, May 21 8:30 a.m. Housing Starts (April) 8:30 a.m. Initial Claims (05/16) 8:30 a.m. Philadelphia Fed Index (May) 9:45 a.m. S & P Global PMI Manufacturing preliminary (May) 9:45 a.m. S & P Global PMI Services preliminary (May) Earnings: Take-Two Interactive Software , Deckers Outdoor , Ross Stores , Workday , Walmart , Ralph Lauren , Deere & Co. Friday, May 22 10:00 a.m. Leading Indicators (April) 10:00 a.m. Michigan Sentiment final (May) — CNBC’s Chris Hayes contributed to this report.