Financial Market News | Saturday Review

Nine straight weeks of gains. Gone in one session.

The Nasdaq fell 4 percent Friday, its worst single day since April 2025. The S&P 500 fell 2.4 percent. The Philadelphia Semiconductor Index dropped 9 percent. Micron (MU) fell 11 percent. Marvell Technology (MRVL) fell 12 percent. Broadcom (AVGO) fell another 7 percent on top of its 13 percent drop Thursday. Bitcoin fell below $60,000 for the first time since October 2024.

The rotation was decisive. Consumer staples rose 2 percent. Healthcare rose 1.7 percent. Procter & Gamble (PG) and Clorox (CLX) each gained more than 5 percent. Investors did not leave the market. They moved to the parts of it that do not depend on AI growth projections or low rates to justify their prices.

The trigger was payrolls. The underlying pressure had been building all week. Broadcom's flat guidance Wednesday started the rotation. The jobs report finished it. Rate hike odds by year-end jumped to nearly 70 percent. The 30-year Treasury crossed 5 percent.

The week felt like a rally running out of easy answers. Friday confirmed it.

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The SpaceX roadshow opened Wednesday at a fixed price of $135 per share. No range. No price discovery. The largest IPO in history, take it or leave it.

That posture looked bold until Thursday evening. S&P Dow Jones Indices confirmed it was not changing its rules. SpaceX posted a $4.94 billion loss in 2025 and S&P's profitability requirement is unchanged. The estimated $20 billion in automatic passive fund demand that institutions had treated as a backstop is gone. Nasdaq changed its rules and SpaceX will join the Nasdaq 100 quickly, but that passive demand is much smaller.

What remains at $135 is conviction. Morningstar published a $780 billion counter-valuation. The same week, xAI paused hiring for the specialists training Grok after two rounds of layoffs already hit that team. SpaceX now prices tonight into the worst day for AI stocks in over a year.

Jefferies analysts noted Friday that investors are selling Magnificent Seven names specifically to rotate into SpaceX. The AI trade is competing with itself for capital.

The Takeaway 

SpaceX prices tonight. A first-day close below the offer price next week would reveal how much of the demand story depended on passive flows rather than conviction.

This is the week the market named its real problem with AI infrastructure stocks.

Palo Alto Networks (PANW) beat and raised. Down 5.6 percent. CrowdStrike (CRWD) beat and raised. Down 11 percent. Broadcom (AVGO) beat but held its full-year AI chip target flat. Down 13 percent Thursday. Ciena (CIEN) reported revenue up 40 percent and raised guidance. Down 19 percent. Four consecutive beats. Four consecutive selloffs.

Then Friday added the sector-wide chapter. Broadcom fell another 7 percent. Micron dropped 11 percent. Marvell fell 12 percent. ARM Holdings (ARM) fell 7 percent. Intel (INTC) and AMD (AMD) each fell around 10 percent. The Philadelphia Semiconductor Index fell 9 percent. This was not individual stocks being punished for missing expectations. It was the entire category repricing under higher rates simultaneously.

The Nasdaq is still up roughly 10 percent this year. The Philadelphia Semiconductor Index is still up 75 percent despite this week's losses. This is a correction in a sector that had tripled. That context matters.

The AI demand thesis is intact. The positioning thesis is broken.

The Takeaway 

For these stocks to recover ground, beats now have to be large enough to surprise a market that spent months front-running them. That is a harder standard than any of them faced this week.

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Wednesday, Partners Group capped withdrawals at 5 percent after receiving nearly 10 percent in requests. The CEO named the contagion mechanism on Bloomberg television. Thursday, Blackstone (BX) capped withdrawals on Bcred, the largest private credit fund in the world at $79 billion, after investors requested 10 percent back. In Q1, Blackstone paid out everything. Q2 requests rose and that stance quietly ended.

A KBRA analysis of 2,400 middle-market borrowers suggests a growing share are relying on external financing rather than operating cash flow to meet obligations. Private market valuations lag public ones by quarters.

The Takeaway 

The 4 to 5 percent single-day declines at Blackstone, KKR (KKR), Ares Management (ARES), and Blue Owl Capital (OWL) earlier this week name what public markets expect those delayed write-downs to eventually show.

Warsh pledged to run Fed policy using the Dallas trimmed mean inflation gauge rather than core PCE. Core PCE showed 3.3 percent in April. The trimmed mean showed 2.3 percent. That gap is the difference between a rate hold and a rate cut at the June 16 meeting.

Wednesday, Dallas Fed President Lorie Logan said her own staff warns the trimmed mean is currently unreliable. A technical factor is causing it to read below actual inflation. Logan is not an outside critic. She runs the institution that created the measure.

Then payrolls landed at 172,000 against an 80,000 consensus. April was simultaneously revised to 179,000 from 115,000. Rate hike odds by year-end jumped from under 50 percent to nearly 70 percent in a single session. The 10-year yield crossed 4.53 percent. The 30-year crossed 5 percent.

Economists noted that an early Memorial Day and World Cup prep hiring may have pulled some seasonal jobs into May from June. Leisure and hospitality added 70,000 alone. Even stripping those sectors, the report was strong. Warsh enters June 16 with a labor market that does not need help.

The Takeaway 

Warsh enters his first meeting with his preferred gauge flagged as broken by its own creator, a labor market that does not need help, and inflation at 3.8 percent. The trimmed mean argument just got harder to sell to the committee.

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FERC called a July meeting to discuss breaking up PJM Interconnection, the grid operator serving 67 million people including Data Center Alley in northern Virginia. Wholesale power prices in PJM territory jumped 76 percent in Q1. PJM has more than 19,000 megawatts of connection requests waiting, more than twice its current peak demand.

In Arizona, the state's largest utility proposed a 45 percent rate increase for data centers and a 14.5 percent hike for households. More than 120 similar disputes are working through regulators nationally. JPMorgan found more than 60 percent of data center capacity planned for 2027 is not yet under construction.

The Takeaway 

The capital is available. The power and permitting infrastructure is not. The grid constraint is the reason capital raised this week cannot deploy on the schedule the market is pricing.

Block (XYZ) disclosed that Americans used buy-now-pay-later services at gas stations an average of 3.6 times per customer between February and May. Afterpay charges 7.5 percent over six weeks, which annualizes to roughly 65 percent. Consumers are financing essential purchases at rates that would have been unacceptable two years ago.

Walmart (WMT), Target (TGT), and Home Depot (HD) all named tax refund timing as a key support for Q1 results. That support fades in Q2. Gasoline inventories are 5 percent below the five-year average as refineries prioritize jet fuel for higher margins. The Iran war added $4.4 billion in extra fuel costs for U.S. airlines in March and April alone, per Transportation Department data. Analysts say $5 gas could arrive by July or August.

The Takeaway 

The consumer underneath the rally has less room than the indexes suggest. Q2 data will show whether tax refunds were masking weakness or simply smoothing it.

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The week that looked like a rally ended with its worst session in over a year.

SpaceX priced into a disappearing safety net. Four AI companies beat estimates and all four sold, then Friday took the whole sector down another 9 percent. Private credit contagion crossed from whisper to public admission. The Fed's preferred inflation tool was flagged as broken by its own creator. The power grid is the bottleneck nobody priced. And the consumer is financing gas on installment loans.

SpaceX prices tonight. The market still has not answered most of these questions. Next week it has to start.