By Jared Mitovich

While shoppers look for deals at the store, traders are looking to the stars.

Spaceships and quantum chips are becoming the latest objects of investors' fascination -- and the latest opportunity to exist in a world away from warning signs about U.S. consumers and fickle peace talks between the U.S. and Iran.

Taken together, there is a sharpening contrast in markets between the wartime inflation surge and the promise of AI, aerospace, and emerging tech -- which benefited Thursday from Nvidia's strong earnings, federal investment in quantum computing and SpaceX's leap toward the biggest IPO in history.

"It's really a dichotomy when you look at the consumer," said Ken Mahoney, chief executive of Mahoney Asset Management.

That dichotomy grew ever more apparent Thursday. IBM's stock soared 12%, helping lead the Dow Jones Industrial Average to its first record close since Feb. 10. Walmart was the worst performer in the blue-chip index, sliding 7.3% after the retail giant forecast earnings slightly below expectations in the current quarter and noted that high gasoline prices were causing stress among some consumers.

"When I look at the consumer, especially here in the U.S., they're telling us they're feeling some pressure," Walmart Chief Executive John Furner said in the company's quarterly earnings call, adding that the retailer might see more shoppers as a result.

Walmart's warning isn't a one-off. Throughout the week, a chorus of America's biggest retailers, including T.J. Maxx and Target have pointed to signs of increasingly budget-conscious customers. In its own earnings report published Tuesday, Home Depot said homeowners are pulling back on large, expensive projects -- opting to renovate just the kitchen, for instance, rather than the whole house.

And the outlook for consumer sentiment -- already measured at all-time lows this month by the University of Michigan -- isn't getting any rosier, with oil prices still near $100 a barrel and the average gas price above $4.50 a gallon. Brent crude futures briefly rose to $108 a barrel on Thursday before falling on reports of progress toward a peace deal between the U.S. and Iran. The Strait of Hormuz has been effectively shut for nearly three months -- costing U.S. consumers an additional $800 million on gasoline and diesel each day.

"The upsurge in oil prices is leaving an appreciable imprint on global inflation," Citi analysts said in a note on Thursday. The bank simultaneously revised its forecast for U.S. consumer prices upward and noted that its Levkovich index, a gauge of U.S. market sentiment, is in "euphoria" territory -- touching levels only seen during the dot-com bubble and the stock-market rebound that followed the Covid-19 pandemic.

Mahoney said that the current economy encompasses both one of the best investment cycles since the 1990s for businesses and a real, unfolding squeeze for consumers. "It's a tale of two markets," he said.

SpaceX's move toward a blockbuster IPO rippled throughout Wall Street -- lifting space-focused companies like AST SpaceMobile and Virgin Galactic up more than 7%. And the Trump administration's $2 billion investment in the quantum industry signaled confidence in businesses at the cutting edge of quantum computers, which can solve problems much faster than traditional computers. President Trump is also weighing how to oversee the AI industry.

Despite the bullish trends in tech, the Nasdaq composite gained only 0.1% Thursday, trailing the S&P 500's 0.2% gain and the 0.6% advance that sent the Dow industrials to its record close of 50285.66.

Shares of GlobalFoundries, which works on specialized chips for quantum computing and will receive a government grant, rocketed 15% to a new all-time high. IBM's rally came after it said it would create a new company called Anderon that would become "America's first pure-play quantum foundry." In all, nearly a dozen quantum companies are due to receive a U.S. government investment, equity stake, or both.

With a $1 billion federal incentive in hand, Anderon "will help the nation solidify its leadership at the center of a thriving new quantum industry that is estimated to generate up to $850 billion in economic value by 2040," IBM said.

Write to Jared Mitovich at jared.mitovich@wsj.com

(END) Dow Jones Newswires

May 21, 2026 16:53 ET (20:53 GMT)

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