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All three main equity indexes closed lower on Friday, as the AI trade unwound a little more in the wake of weak guidance from a major chip player. Meanwhile, a much stronger-than-expected nonfarm payrolls report sapped almost all hope for lower interest rates this year.
The front-month West Texas Intermediate crude oil futures contract was down 2.9% to $90.32 per barrel on Friday but rose 3.4% this week. The U.S. and Iran are in a stalemate in the Middle East, and the Strait of Hormuz remains closed, with Saturday marking 100 days since the war began on February 28.
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At the closing bell, the Nasdaq Composite was down 4.2% for the day and 4.7% for the week at 25,709. The broad-based S&P 500 had shed 2.6% to 7,383, finishing the five days with a loss of 2.6%.
The Dow Jones Industrial Average hit another new all-time high on an intraday basis early in the session but finished down 1.4% at 50,866. The index of blue chip stocks finished the week lower by 0.3%.
Hot jobs report sends rates higher
The 2-year Treasury yield, the market’s measure of the Fed’s intentions for the federal funds rate, ticked up to 4.16% from 4.049% on Thursday and 4.014% on Friday, May 29.
The 10-year Treasury yield, considered a broad measure of the economy but also the basis for the cost of corporate debt and auto loans, rose to 4.542% from 4.477% on Thursday and 4.453% last Friday.
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New Fed Chair Kevin Warsh might be able to do several things to change the central bank right now, but it looks like he won’t be able to cut interest rates as soon as President Donald Trump would like. The next Fed meeting, for what it’s worth, runs from June 16-17.
IBM leads the Dow lower
IBM traded at its 52-week low of $212.34 intraday on May 13, so it’s a 56.6% bottom-to-top run in about two and half weeks that’s being digested.
As Wedbush analysts Matt Bryson and Antoine Legault explain, IBM is focused on building a “fault-tolerant” quantum computer by 2029, IBM Quantum Starling. Its planned investment is “another validation of quantum technology’s potential.”
“While we view IBM’s 2029 goal as the de facto industry standard at this point (with most vendors targeting 2029/2030 for quantum equivalency),” the analysts write, “the scale of capital and a dedicated domestic foundry arguably give IBM’s goal more weight than a standalone roadmap slide.”
IBM was also named a partner for Nvidia’s Vera Rubin AI accelerators.
TTAN is a blue-collar tech stock
ServiceTitan (TTAN, +4.1%) is definitely a tech stock according to S&P Global Market Intelligence, but it makes software for plumbers, electricians and other blue-collar tradespeople. That distinction hasn’t exempted it from the existential crisis for software stocks in 2026.
But a team of Morgan Stanley analysts led by Josh Baer sees TTAN as a “Top Pick” based on a “clean beat” for fiscal first-quarter results, including gross transaction volume, revenue, margins and free cash flow. Full-year guidance was ahead of Wall Street’s forecast, too.
The analysts reiterated their Overweight (Buy) rating and raised their 12-month target price from $118 to $124 after ServiceTitan reported earnings on Friday.
As Baer and his colleagues note, growth accelerated for ServiceTitan. Meanwhile, artificial intelligence and its opportunity in the commercial space “expand the story,” the fiscal 2027 setup “looks attractive,” and TTAN’s valuation “remains compelling.”
At the same time, the analysts write, ServiceTitan is “well positioned for AI,” based on ownership of “vast proprietary data sets serving as a moat.” It also “enjoys current and future potential for high market share to yield large installed bases into which it can sell its AI solutions.”
