Friday Frown. A week that saw stocks notch several days of record highs ended on a down note, as artificial intelligence optimism took a back seat to worries over rising interest rates and geopolitics.

The Dow Jones Industrial Average lost 1.1% on Friday, while the S&P 500 fell 1.2% and the Nasdaq Composite lost 1.5%.

AI was the engine powering the market this week, as it has for so many others. But that enthusiasm looks like it’s petering out, and investors are taking some money off the table.

A high inflation reading on Tuesday seems to have finally caught up with Wall Street. Higher oil prices are big part of that, and Brent Crude rose again on Friday as the summit between U.S. and China failed to end hostilities in the Middle East. The Strait of Hormuz remains closed, and “there were no breakthroughs on Iran, broader geopolitics, or the economic relationship,” writes 22V Research’s Michael Hirson.

That collection of anxieties contributed to the yield on 10-year Treasuries to surge to 4.595% today, and the yield on 2-year notes jumped to 4.082%. Markets appear to be realizing that hopes of a Fed interest rate cut later this year might be misplaced, and in fact there could even be an interest rate hike.

“Equity markets have been supported by a technology-led rally and strong earnings, while bond markets have focused more on inflation risks, higher oil prices, and policy uncertainty,” writes Edward Jones Senior Global Strategist Angelo Kourkafas. “The recent rise in yields may be approaching levels that begin to weigh on equity performance.”

Results from tech’s 800-pound gorilla Nvidia next week could reignite the rally. But with the current earnings season wrapping up—fantastic as it was—there isn’t much other good news to support the market in the near term. But there are plenty of other concerns.

Watch our TV show on Fox Business Saturday or Sunday at 9:30 a.m. and 10:30 a.m. ET. This week, NewEdge Wealth’s Cameron Dawson talks about whether it’s time to cut back on chip stocks. Plus, Andrew Bary’s list of blue chips that are near lows but look attractive.

The Hot Stock: Meta Platforms +6.5%
The Biggest Loser: Tesla -8.2%

Best Sector: Consumer Discretionary +1.2%
Worst Sector: Utilities -1.2%

Only 17 S&P 500 index companies report results next week as earnings season winds down. But stock market impact won’t be lacking as the world’s most valuable company, Nvidia, announces earnings on Wednesday, and U.S. consumer bellwether, Walmart, reports results on Thursday.

Other companies releasing earnings on the week include Home Depot on Tuesday, Lowe’s and Target on Wednesday, and Deere on Thursday.

This week’s economic calendar is light with some housing-related updates. The National Association of Realtors reports pending home sales on Tuesday, while the Census Bureau releases residential construction statistics on Thursday. That same day S&P Global releases its Manufacturing and Services Purchasing Managers’ Indexes.

—Dan Lam

• Berkshire’s Busy First Quarter

• The Stock Market Rally Faces a Stark Reality. Things Could Get Tricky.

• 2 Reasons Not to Chase Cerebras After Hot IPO

• SpaceX IPO: A Huge Week Ahead With Potential S-1 Filing and Rocket Launch

• A Micron Peer Is Coming to U.S. Stock Market. What to Know About Japan’s Kioxia.

• And this weekend’s Barron’s cover: Energy Roundtable: 11 Stocks to Play the Biggest Energy Supply Shock Ever

Join Barron’s Live on Monday at Noon. J.P. Morgan Private Bank published its Mid-Year Outlook on May 11, focusing on the investment implications of global fragmentation, sticky inflation, and the AI supercycle. Stephen Parker, managing director and co-head of global investment strategy at the Private Bank, joins Barron’s Senior Managing Editor Lauren R. Rublin and Senior Writer Paul R. La Monica to discuss the firm’s market outlook and the report’s highlights.

Barron’s Live features timely and actionable insights for investors. We give you behind-the-scenes conversations with the newsroom, connecting you with our editors and reporters covering the markets, the economy, and more.

Sign up here