TL;DR

  • Greg Abel's first 13F as Berkshire Hathaway CEO reveals sweeping exits: Amazon, Visa, Mastercard, UnitedHealth, and Domino's all fully sold in Q1 2026.
  • Alphabet (GOOGL) stake more than tripled; Delta Air Lines (DAL) and Macy's (M) added as new positions.
  • The S&P 500 fell 1.24% on Friday, May 15; the Nasdaq dropped 1.54% as 30-year Treasury yields hit 5.12%, their highest level since May 2025.
  • Nvidia (NVDA) declined 4% ahead of its May 20 earnings report. The AI trade is on pause as bond yield pressure compounds sentiment risk.
  • This week: Nvidia earnings Wednesday, Kevin Warsh's Fed transition, and elevated oil prices all add to headline risk for US equities.

What Happened

Friday, May 15 delivered two significant signals for US equity markets, arriving within hours of each other.

After the closing bell, Berkshire Hathaway released its Q1 2026 13F filing, the first full portfolio snapshot under new CEO Greg Abel. Abel took the helm on January 1 after Warren Buffett retired at year-end. The changes were sweeping: Berkshire exited 16 positions in Q1, approximately one third of its equity portfolio.

The most notable exits included Amazon (AMZN), Domino's Pizza (DPZ), Visa (V), Mastercard (MA), UnitedHealth Group (UNH), and a 35% reduction in Chevron (CVX). Six previously held Japanese trading stocks were also cleared. On the buy side, Abel more than tripled Berkshire's stake in Alphabet (GOOGL), adding 36.4 million Class A shares and 3.6 million Class C shares. New positions were opened in Delta Air Lines (DAL) and Macy's (M). Apple (AAPL) remained largely intact.

Meanwhile, the bond market triggered a broad equity selloff. The 30-year Treasury yield climbed to 5.12%, its highest since May 2025. The 10-year yield rose to 4.59%. All three major US indexes finished lower: the S&P 500 shed 1.24%, the Nasdaq fell 1.54%, and the Dow dropped 1.07%.

Nvidia (NVDA) slid 4% as investors trimmed AI-exposed positions ahead of the company's earnings report on Wednesday, May 20. Despite the broad decline, the S&P 500 still logged its seventh consecutive weekly gain. The Nasdaq, however, snapped a six-week winning run.

Greg Abel's Berkshire Portfolio Overhaul: What It Signals for US Stocks

Abel's Q1 moves are not purely tactical. They suggest a strategic reorientation of Berkshire's equity book around specific macro convictions.

The full exit from Amazon ends a position that had already been reduced by 77% in Q4 2025. While Amazon holds durable competitive advantages across cloud and e-commerce, Abel appears to be applying strict valuation discipline: if the fundamental margin of safety is not present, the position goes. The Domino's exit is more striking. Berkshire had purchased shares for six consecutive quarters before reversing course. Weak same-store sales data offers a partial explanation: US comparable sales grew just 0.9% in Q1 2026, and international same-store sales declined 0.4%, a rare result for a brand positioned around global value pricing.

The elimination of Visa and Mastercard, two businesses with near-monopoly economics in global card networks, is harder to explain on company-specific grounds alone. It may reflect a broader concern about consumer credit health and payment volume growth as higher interest rates constrain discretionary spending.

The Alphabet bet is the clearest expression of Abel's conviction. Google's advertising platform, combined with cloud infrastructure and early AI monetization, offers high cash generation, reasonable valuation relative to earnings power, and structural exposure to AI growth. This profile stands in contrast to higher-multiple pure-play AI names that are now more exposed to yield-driven compression.

Why Markets Moved

The simultaneous arrival of Berkshire's 13F and spiking Treasury yields reinforced a growing concern across equity desks: the bond market is sending a warning that equities have been slow to hear.

When 30-year yields exceed 5%, they compete directly with equity return expectations and compress the present value of future earnings across all sectors. For high-multiple technology stocks trading on 2027 or 2028 earnings projections, that compression is disproportionate. The Nasdaq's steeper selloff relative to the S&P 500 on Friday reflects exactly this math.

The macro backdrop compounds the pressure. The Trump-Xi summit produced limited tangible results. The Iran nuclear standoff, combined with Strait of Hormuz disruption risk, keeps oil elevated and feeds global inflation fears. As one strategist told Reuters: the market "wasn't paying enough attention to what the bond market and economic data is telling it. It was caught up in this momentum AI trade." Friday's selloff may mark the beginning of a recalibration.

Implications for US Stock and Equity Traders

For traders positioned in US equities, the current setup demands attention to several converging risks.

Bond yield sensitivity is the dominant near-term variable. Any further upward move in 30-year yields will pressure growth stock multiples, particularly across the Nasdaq 100. Traders in long-tech positions should monitor the 5.15-5.20% range on the 30-year as the next key test.

Berkshire's sector exits create signal value for stocks that may now face institutional distribution: Visa (V), Mastercard (MA), UnitedHealth (UNH), and Chevron (CVX). None of these exits should trigger mechanical panic selling, but they represent a data point that a large, fundamentally oriented buyer no longer sees compelling value at current prices.

The Nvidia earnings event on Wednesday functions as a binary catalyst for the broader AI trade. A strong print with bullish guidance on H20 chip demand could reignite buying across semiconductors and AI infrastructure. A miss or cautious outlook could extend tech selling into the final weeks of May. See also: Nvidia Earnings May 20: Chipmakers Are the S&P 500's Biggest Bet Right Now.

Potential Positives vs Negatives

Positives

  • S&P 500 extended its winning streak to seven weeks before Friday's pullback, confirming structural buying support at current levels
  • Berkshire's aggressive GOOGL accumulation signals institutional confidence in large-cap tech with real AI monetization exposure at a reasonable multiple
  • Nvidia earnings Wednesday could reignite the AI narrative if results and data center guidance exceed expectations
  • Delta Air Lines addition by Berkshire signals value-buyer conviction in the airline recovery thesis, a positive for the broader transportation sector
  • Bill Ackman's Pershing Square disclosed a new Microsoft (MSFT) stake on Friday, adding another institutional data point supporting large-cap tech

Negatives

  • 30-year Treasury yields at 5.12% directly compress equity multiples; further extension toward 5.2% would accelerate growth stock repricing
  • Berkshire's Visa and Mastercard exits raise a question mark over consumer payment volume growth and the durability of discretionary spending
  • UnitedHealth exit follows sector-wide pressure; healthcare insurers face rising medical cost ratios that may not have fully cleared
  • Nvidia's 4% premarket decline and elevated implied volatility indicate a wide expected earnings range; a guidance miss could accelerate tech selling across the sector
  • Kevin Warsh's first weeks as Fed chair add policy uncertainty at a fragile moment for both rates and equity markets. See: Fed Regime Change: Warsh Inherits the S&P 500's Worst Day Since March
  • Elevated oil prices keep energy cost pressure on consumer discretionary, airline, and industrial sector margins

What could happen from here

Three credible paths for US equities over the next week to 10 days:

Base case (40%): Consolidation and rotation. The S&P 500 holds in the 5,750 to 5,900 range. Bond yields stabilize near 5.1% as oil plateaus. Nvidia delivers solid results with measured guidance that preserves AI optimism without sparking a momentum-driven melt-up. Rotation from high-multiple growth into value and Berkshire-favored sectors (tech platforms, airlines) continues at the margin.

  • Confirmation: 10-year yield holds below 4.65%; Nvidia data center revenue beats consensus by at least 6-8%
  • Invalidation: 30-year yield breaks 5.2%, or Nvidia provides below-consensus forward guidance

Upside case (30%): Nvidia rekindles the AI rally. Nvidia significantly beats expectations and gives strong guidance on H20 chip demand and data center buildout. AI sentiment reignites, Nasdaq rebounds sharply, and bond yields stabilize as oil risk moderates. S&P 500 retests and potentially reclaims 5,900 to 6,000.

  • Confirmation: Nvidia data center revenue materially above $37B consensus; management positive on China AI chip access under the new trade framework
  • Invalidation: Continued oil surge reignites global inflation narrative regardless of Nvidia print

Downside case (30%): Yield and sentiment double-pressure. 30-year yields extend above 5.2%. Nvidia disappoints on guidance. Oil stays elevated, compressing margins across consumer, airline, and industrial sectors. S&P 500 tests the 5,600 support zone. The Nasdaq underperforms as AI sentiment resets alongside yield pressure. See the full bond selloff context: G7 Finance Ministers Convene as Global Bond Selloff Deepens: US 30-Year at 5.12%.

  • Confirmation: CPI prints above expectations; Nvidia guidance soft or cautious on China chip restrictions; Iran standoff escalates
  • Invalidation: Rapid Hormuz resolution, G7 energy action, or materially dovish signal from Warsh

Frequently Asked Questions

Why did Berkshire sell Visa and Mastercard?
No public explanation has been given. The move may reflect a macro view that consumer payment volumes face headwinds from higher interest rates. Berkshire's exit does not necessarily mean these companies are in fundamental trouble; it means they did not meet Abel's required margin of safety at current valuations.

Does Berkshire's Alphabet buy signal a peak in AI stocks?
Not necessarily. Abel's move into GOOGL is consistent with a preference for AI beneficiaries trading at reasonable multiples over pure-play names with compressed margin-of-safety profiles. Alphabet generates substantial cash and has AI embedded across its core advertising and cloud businesses, making it a different risk profile than high-multiple semiconductor or SaaS AI plays.

What traders should watch next

  • Nvidia (NVDA) earnings, Wednesday May 20 after the close: Data center revenue consensus is approximately $37 billion. Forward guidance on H20 chip exports and AI inference demand will drive sentiment across the entire semiconductor complex. This is the single largest stock-market event this week.
  • 30-year Treasury yield: A break and daily close above 5.2% would signal a meaningful escalation in yield-driven equity compression, particularly for Nasdaq growth names.
  • Consumer and retail earnings: Abel's exits from Domino's and payment networks will find partial validation or contradiction in upcoming consumer spending data and retailer results over the next two weeks.
  • Kevin Warsh Fed signals: Any public comments from the incoming Fed chair on inflation tolerance, the rate trajectory, or the bond market selloff will be closely parsed by rates and equity desks.
  • Brent crude and Strait of Hormuz: Crude holding near $109 to $111 keeps energy cost pressure elevated. Any de-escalation in the Iran situation could rapidly ease yield and inflation concerns; further escalation would do the opposite.

Sources

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