The S&P 500 ended the week of War Days 73–77 at +0.3%. The Nasdaq ended at +0.3%. The Dow ended at −0.05%. These numbers do not tell you that Tuesday’s CPI was the hottest since May 2023. They do not tell you that Wednesday’s PPI was the hottest since December 2022. They do not tell you that Trump returned from Beijing without a ceasefire, without a Hormuz operational mechanism, and without the 500-jet Boeing order markets had priced. They tell you only that the AI earnings story — Cisco, Applied Materials, Nebius, Cerebras — was strong enough to absorb all of it and close the week marginally higher. The bull thesis held. Barely.
Friday was the market’s measurement of the summit gap. The Dow fell 537 points and dropped back below 50,000, erasing Thursday’s milestone close. The Nasdaq shed 1.54%. Nvidia lost 4.4%. Micron Technology fell 6.6%. AMD shed 5.7%. Cerebras Systems — which debuted at +68% on Thursday — fell 10% on Friday. The Russell 2000 closed up 0.67%, the only major positive segment. Small caps and software rotated higher as AI hardware gave back a portion of its recent surge. Dan Niles (Niles Investment Management) said on CNBC: “Ten of the last 12 recessions were preceded by a spike in oil. This is starting to get uncomfortable.”
The week’s most important number is not Friday’s −1.24%. It is the +0.3% that survived it. The AI infrastructure earnings cycle — record results from Cisco, Applied Materials, and Nebius all in five days — is carrying the market through conditions that should, by conventional macro analysis, be suppressing it. Whether that continues depends on Nvidia, which reports May 20.
Friday’s selloff had three simultaneous drivers: summit hangover (no Iran breakthrough, Boeing deal smaller than priced), yields at 4.55% (one-year high compressing growth multiples), and profit-taking across AI hardware names that had surged 50–143% in recent weeks. The PHLX Semiconductor Index (SOX) — which had rallied 143% over the prior year — was trading 32% above its 50-day moving average entering the session. A reversion of that magnitude does not require bad news. It only requires the absence of new catalysts. Friday provided that absence.
The session’s most meaningful signal was not the magnitude of the decline but the Russell 2000’s +0.67% gain. When small caps rise as large-cap tech falls, it typically signals rotation rather than risk-off panic. Capital is moving within equities — from stretched AI hardware names toward small caps and software (ServiceNow +2.3% on Thursday, Microsoft +4% on Friday from Ackman’s Pershing Square building a position at 21x forward earnings). The AI thesis is not being abandoned; it is being redistributed across the stack from hardware to software.
The Federal Reserve Board voted Friday to designate Jerome Powell as chair pro tempore until Kevin Warsh is officially sworn in, announcing the move in a terse press release: “This temporary action to name the incumbent as chair pro tempore is consistent with past practice during similar transitions between chairs.” The statement did not specify the statutory authority behind the action. The Federal Reserve Act does not provide an express mechanism for filling a chair vacancy during a transition — it provides only that if both the chair and vice chair are absent, the Board may elect a member to serve as chair pro tempore.
Two of the seven Federal Reserve governors voted against or withheld support: Governor Steven Miran voted against the designation, and Governor Michelle Bowman abstained. Both objected to the unlimited nature of the arrangement, stating it “should be subject to renewal by another vote of the Board or potential presidential action.” The governance concern is structural: if a Fed Board can unilaterally extend a departing chair’s authority without a defined endpoint and without presidential involvement, it creates a precedent that could be invoked in future transitions regardless of who nominated the outgoing chair. Powell dismissed the “shadow Fed chair” characterization, pledged to keep a low profile, and — when asked by reporters how he would do so — made light of the situation and ducked below the podium. The last similar situation occurred in 1948, when Marriner Eccles resigned as chairman but remained on the board until 1951.
Trump announced Friday that China has agreed to purchase 200 Boeing jets equipped with GE Aerospace engines, with the potential to buy as many as 750 aircraft. “They’re going to go to Texas,” Trump said, “we’re going to start sending Chinese ships to Texas and to Louisiana and to Alaska.” The announcement is the largest concrete commercial deliverable of the Beijing summit — a bilateral trade commitment with a specific number, specific products, and specific US manufacturing states attached. It is real. It also disappointed.
Markets had priced an order of 500 or more planes in a deal valued at approximately $77 billion, based on pre-summit reporting. The 200-jet announcement — roughly 40% of the expected volume — sent Boeing (BA) shares down 2.8% to $222.70. GE Aerospace’s reaction was mixed. The gap between the priced expectation and the actual deliverable is a textbook summit gap in commercial terms: the number is real but the market had already bought the rumour. Friday was the sell-the-news session.
Bitcoin closed Friday at $79,080 — down 2.89% and back below $80,000. The week’s BTC trajectory mirrors the week’s geopolitical narrative with near-precision. Monday: $81,703 (summit expectations building). Wednesday morning: $78,750 low (PPI double-beat, both support levels broken). Thursday: $80,878 recovery (CLARITY Act passage + Hormuz free waterway declaration). Friday: $79,080 (summit concluded thin, yields at one-year high, no Iran resolution). The coin traded the week’s events almost point-for-point. The diplomatic gauge is reading: deal signals are being partially discounted by the market, and the macro rate-hike environment is the dominant headwind.
The structural case remains intact. The CLARITY Act cleared the Senate Banking Committee 15-9 with bipartisan support Thursday. Citi’s $143,000 base-case target and $15 billion in projected ETF (exchange-traded fund) inflows remain tied to its eventual passage. Charles Schwab launched spot BTC and ETH trading Wednesday. These structural positives do not expire over a weekend. The question entering next week is whether the CLARITY Act’s Senate floor momentum can compete with a Fed Chair who inherited a 45% rate hike probability and yields at a one-year high. Nvidia’s May 20 earnings — the week’s largest remaining AI catalyst — will set the risk-on or risk-off tone that BTC trades into.
| Market | Friday | Week & Context |
|---|---|---|
🇰🇷 South Korea (KOSPI) |
−6%+ to 7,493.18 |
Hit record above 8,000 intraday before crashing more than 6% to close at 7,493. The week’s most violent round-trip: KOSPI hit its all-time high above 8,000 on the AI chip and summit optimism wave, then gave it all back Friday on the profit-taking cascade. SK Hynix and Samsung both fell sharply tracking global chip names. |
🇯🇵 Japan (Nikkei) |
−1.1% |
Nikkei declined 1.1% on Friday. Week roughly flat to slightly negative. Risk-off session tracking US chip selloff. BOJ rate hike discussion adding domestic policy uncertainty. Nintendo down for the week on Switch 2 price hike concerns. |
🇨🇳 China / HK |
HSI −0.89% · CSI flat |
Hang Seng fell 0.89% Friday; CSI 300 essentially flat. China markets held relatively steady as Beijing absorbed the summit outcome. Xi’s White House September invite and Boeing deal provide diplomatic cover. Yuan held near 6.789/dollar. |
🇮🇳 India (Nifty) |
Under pressure |
WTI above $102 remains a direct economic tax on India. SENSEX worst major index year-to-date. Rising US yields tighten EM financial conditions and accelerate capital outflows from oil-importing emerging markets. |
🇪🇺 Europe (FTSE, DAX, CAC) |
−0.9% to −1.4% |
DAX ~−1.4%, FTSE ~−1.1%, CAC ~−0.9% on Friday. European shares extended losses as bond yields across the continent rose on US inflation fears. UK Prime Minister Starmer faces a potential leadership challenge adding domestic pressure on sterling and gilts. Mining and utilities sectors led European declines. |
| Index | Mon WD73 | Tue WD74 | Wed WD75 | Thu WD76 | Fri WD77 | Week |
|---|---|---|---|---|---|---|
| S&P 500 | +0.19% | −0.16% | +0.58% | +0.77% | −1.24% | +0.3% |
| Nasdaq | +0.10% | −0.71% | +1.20% | +0.88% | −1.54% | +0.3% |
| Dow Jones | +0.19% | +0.11% | −0.14% | +0.75% | −1.07% | −0.05% |
| Event: Record #7 · CPI +3.8% YoY · PPI +6.0% YoY + Records + Warsh Chair · Hormuz agreed + AMAT +8% AH · Summit gap + yields 4.55% | ||||||
| Asset | Friday Close | Change | % Move | Context |
|---|---|---|---|---|
| S&P 500 | 7,408.50 | −92.74 | −1.24% | Summit gap; yields 4.55%; chip profit-taking · Week: +0.3% |
| Nasdaq Composite | 26,225.14 | −410.08 | −1.54% | AI hardware selloff led · Week: +0.3% |
| Dow Jones | 49,526.17 | −537.29 | −1.07% | Back below 50,000 · Week: −0.05% |
| Russell 2000 | — | +0.67% | +0.67% | Only major positive · Rotation from AI hardware |
| VIX | 18.00 | +0.74 | +4.29% | Fear gauge rising; not spiking |
| WTI Crude (June) | ~$102.74 | +4.17% | Higher | Trump China oil deal driving buying; Hormuz still closed |
| Brent Crude (July) | $107.30 | +1.49% | Higher | War premium sustained |
| Gold | $4,558.80 | −$126.50 | −2.70% | Rate hike 45% = real rates rising = gold pressure |
| 10-Yr Treasury | 4.55% | +9 bps | — | One-year high · Warsh inherits elevated curve |
| Bitcoin | $79,080 | −$2,356 | −2.89% | Below $80K again · Diplomatic gauge: thin summit |
| NVDA | — | −4.4% | −4.4% | Profit-taking; earnings May 20 |
| KOSPI (Korea) | 7,493.18 | −6%+ | −6%+ | From record high above 8,000; largest global decliner Friday |