U.S. stock index futures declined on Friday, pressured by weakness in the technology sector and rising Treasury yields. Following a recent significant rally, investors took profits in tech stocks, weighing on Nasdaq 100 futures.
As of the latest update, Dow Jones futures were down 0.9%, S&P 500 futures were down 1.2%, and Nasdaq futures were down 1.6%.
Intel fell 4%. Advanced Micro Devices (AMD) and Micron Technology each dropped 3%. NVDA 3xLongSG261006 declined 2%.
Cerebras Systems, which surged 68% on its Nasdaq debut Thursday, retreated 3% on Friday.
Adam Crisafulli of Vital Knowledge noted, "The tech sector's rally in recent weeks has been extremely fragile and is highly susceptible to profit-taking, regardless of news flow."
Microsoft bucked the trend, rising 0.6%. Hedge fund manager Bill Ackman posted on social media platform X that his Pershing Square fund had established a position in Microsoft.
Surging Treasury yields weighed on equities, with the 30-year yield surpassing 5.1%, approaching its highest level since 2023. Data this week indicated that Middle East conflict is pushing oil prices higher, reigniting inflation concerns. High interest rates particularly impact high-growth technology stocks.
Oil prices rose on Friday: U.S. West Texas Intermediate crude futures increased 3% to $104 per barrel. International Brent crude futures rose 2% to $108 per barrel.
On Thursday, the three major indices closed higher, with the Dow Jones Industrial Average reclaiming the 50,000-point level and the S&P 500 closing above 7,500 for the first time.
While the artificial intelligence boom has propelled U.S. stocks to consecutive record highs, the broader market's gains have lagged behind leading tech stocks, intensifying divergence and raising concerns about the "fragility of the rally."
Keith Lerner, Chief Investment Officer at Truist Advisory Services, stated Thursday, "The market breadth rally has stalled. Slowing economic momentum is evident in some sectors, but the market remains heavily reliant on tech mega-caps, which is why the major indices can still maintain strength."
U.S. stocks are poised for a weekly gain: the S&P 500 and Nasdaq Composite are on track for their seventh consecutive weekly advance, while the Dow Jones is set for its sixth weekly gain in the past seven weeks.
Historical warning signals are flashing again: The Shiller P/E ratio for U.S. stocks is approaching its 2000 peak, while the "Hindenburg Omen" has been triggered on both the New York Stock Exchange and Nasdaq.
This week, two significant market signals, notable in financial history, simultaneously turned red, indicating that U.S. stocks are experiencing an extremely rare dual extreme state of valuation and technicals. On the valuation front, the Shiller Cyclically Adjusted Price-to-Earnings (CAPE) Ratio, developed by Nobel laureate Robert Shiller, has soared to 42.32, less than 5% below its peak during the 2000 dot-com bubble.
On the technical front, the rare technical warning signal—the "Hindenburg Omen"—was triggered simultaneously on the NYSE and Nasdaq, reigniting intense debate among traders about whether the U.S. stock market's prosperity is becoming increasingly fragile beneath the surface.
Each signal alone warrants attention, but more importantly, they both point to the same underlying issue: beneath the prosperous facade of indices hitting new highs, the breadth of participation in the rally may be sharply narrowing, with the exuberance of a few giants masking the weakness of most stocks.
The "Warsh Era" at the Fed begins! The U.S. stock bull market faces a stress test.
For financial markets, the combined effect of two key reform initiatives likely under Warsh's leadership—deleveraging the Fed's balance sheet and redefining or reshaping the Fed's analytical framework for inflation—is to increase discount rate pressure on high-valuation assets.
With inflation still elevated, energy shocks unresolved, and the labor market showing resilience, Warsh will find it difficult to pivot quickly to rate cuts. However, if he simultaneously advances balance sheet reduction, weakens excessive forward guidance, and reinforces the priority of price stability, the market will gradually shift from "rate cut expectation trading of the Powell era" to "term premium and inflation credibility trading of the Warsh era."
For the U.S. Treasury market, this implies that yields on 10-year and longer-term bonds will find it harder to decline rapidly, which in turn means limited room for valuation expansion for risk assets like global equities. For the U.S. dollar, it may provide periodic support.
Bank of America: The buying frenzy for stocks and tech stocks may be peaking.
Michael Hartnett, Chief Investment Strategist at Bank of America, believes the investor rush into stocks and tech stocks is nearing its end, suggesting early June might be a time to start trimming positions on strength.
Hartnett and his team judge that "the chase by the bulls in stocks and tech may be exhausted in the coming weeks."
Early June is packed with events—including an OPEC meeting, the opening of the World Cup, Trump's 80th birthday, the G7 summit, and the first Federal Open Market Committee (FOMC) meeting under Warsh's leadership—making this time window an ideal point to reduce exposure.
Inflation concerns escalate! Global bond markets enact "early rate hikes" for the Fed.
Global bond markets are undergoing a new round of intense repricing.
Driven by energy price spikes from the Middle East conflict and rising inflation expectations, yields on U.S., Japanese, German, and U.K. government bonds climbed this week, with several metrics hitting multi-decade or even record highs. The systemic increase in global borrowing costs is reshaping market expectations for central bank policy paths.
On Friday, the yield on the 10-year U.S. Treasury note rose to 4.530%, its highest level since May 2025. The 30-year yield hovered above 5%. The particularly rate-sensitive 2-year yield crossed the 4% threshold, reaching its highest level in months.
This bond market sell-off sweeping the globe is substantively compressing the policy space for central banks.
Vincent Ahn, Fixed Income Portfolio Manager at Wisdom, bluntly stated that the new Fed Chair Warsh likely hoped to have a rate cut option on his first day, but the bond market has taken that option off the table.
U.S. Treasury yields and the dollar surge together, dealing a "double blow" to gold and silver.
As of the latest update, spot gold fell over 2% to $4,551 per ounce, down approximately 3% since last Friday. Spot silver, which earlier this week rose to around $90 per ounce, has largely given up those gains, falling over 6% to $78 per ounce.
The Strait of Hormuz, a critical global energy transit chokepoint, remains virtually closed, and peace talks between the U.S. and Iran are deadlocked. This has heightened concerns that high oil prices will exacerbate inflationary pressures, thereby boosting market expectations for Fed rate hikes.
Against this backdrop, rising U.S. Treasury yields and the strengthening U.S. dollar directly pressured gold and silver prices, which are denominated in dollars.
The U.S. has rejected Iran's written proposal to end the war and "reiterated its hardline stance."
Reports indicate the U.S. has rejected Iran's "14-point" written proposal to end the war. The U.S. government has responded to the proposal, rejecting Tehran's plan and "reiterating its hardline stance," particularly on nuclear issues.
Iran's proposal is based on a two-phase negotiation process: the first phase aims to end the war on all fronts; if Iran's conditions are met, a second phase of negotiations on nuclear issues would commence.
Focus Stocks
Several semiconductor stocks declined, with the iShares Semiconductor ETF poised to end a six-week winning streak. Marvell Technology and Intel both fell 4%. ASML and Arm dropped over 3.5%. Advanced Micro Devices slid nearly 3%.
Applied Materials fell about 2%. The semiconductor equipment supplier reported fiscal second-quarter revenue and net profit that exceeded market expectations. The company reported adjusted earnings per share of $2.86 and revenue of $7.91 billion. Analysts surveyed by LSEG had expected earnings per share of $2.66 and revenue of $7.65 billion.
Chipmaker Cerebras Systems fell 1% on Friday, following its 68% surge on its Nasdaq debut Thursday.
Figma, a collaborative interface design tool company, reported first-quarter adjusted earnings per share of $0.10 and revenue of $333 million, sending its stock soaring nearly 9%. Analysts surveyed by LSEG had expected earnings per share of $0.06 and revenue of $313 million.
Magnum Ice Cream surged over 17%. Blackstone Group and private equity firm CD&R are among companies considering a bid for the company. Potential acquirers plan to wait and observe summer sales performance before taking final action.
Dexcom, a diabetes management company, announced it had reached an agreement with Elliott Investment Management to identify two new independent directors to join its board. Its stock rose over 3%.
Boot Barn Holdings rose over 8% after reporting better-than-expected fourth-quarter revenue. The company reported revenue of $538.8 million, exceeding the $531.2 million expected by FactSet analysts, with earnings also slightly surpassing market estimates.
Papa John's International jumped nearly 7%. The largest Papa John's franchisee in the U.S., which operates 10% of the chain's domestic stores, plans to acquire the entire company and is partnering with Ursa Capital to take it private.
Gemini Space Station, a cryptocurrency exchange, surged 20% after announcing a $100 million strategic investment from Winklevoss Capital Fund. According to FactSet data, the company's first-quarter revenue exceeded expectations, and its loss was smaller than analysts had projected.
Weighed down by a broad sell-off in commodity metals on Friday, mining giant Freeport-McMoRan fell nearly 4%. Among precious metals, gold fell over 2% and silver plunged over 7%. The industrial metal copper tumbled nearly 4%.
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