US stocks rolled over Friday, with the S&P 500 down about 1.1%, the Nasdaq Composite off 1.54%, and the Dow shedding 0.8%. Yesterday's record close didn't last a day. The dovish-Fed trade that drove the S&P above 7,500 for the first time in history is being unwound in the open as tech profit-takers meet a wall of inflation data and rising Treasury yields.

The setup going in was already stretched. Thursday closed with the S&P 500 at 7,501.24, the Nasdaq at 26,635.22, and the Dow back over 50,000 at 50,063.46. All three indexes hit new all-time highs on the same day. Cisco ripped 13.4% on guidance. Nvidia added 4.4% on the H200 China shipment news. AI euphoria did most of the heavy lifting. The narrative was that the Trump-Xi summit would extend the trade-thaw rally and Warsh would lean dovish into his first FOMC.

The session today flipped the script. The S&P was down roughly 81 points intraday. The Nasdaq lost 456 points. The Dow gave back 400. Selling was broad across tech, with Cerebras dropping 5% on Day Two of its IPO and Nvidia falling 1.8% premarket. Boeing tanked 4% on a China deal that came in half-size. Oil ripped over 3% on Trump's China crude claim, lifting energy but adding to inflation worry. The Empire State manufacturing print this morning hit 19.6, the highest in four years, with prices paid at 62.6, the hottest since 2022.

Behind the prices, the bond market is doing the real work. Treasury yields backed up another few basis points across the curve. The dollar firmed. Rate-cut expectations for this year are being repriced again, and that math hits AI multiples first. The Trump-Xi summit ended without major formal breakthroughs, removing one of the catalysts that had supported the upside. Profit-taking after the record run accelerated the move.

What this means for next week is that the records made yesterday now have to be defended. If yields keep rising and inflation prints stay hot, the dovish framing breaks. Warsh inherits a market that priced in a friendlier Fed than the data is going to allow. The June 16-17 FOMC is the next real read. Between here and there, May CPI, retail sales, and another PPI all hit. Each one is a chance to keep yields uncomfortable.

Records get made on hope. They get tested on data. Yesterday was hope. Today is data. The two will keep fighting until one wins.