The S&P just closed above 7,500 for the first time. The 10-year just hit a 12-month high. One of them is wrong.
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The S&P 500 closed above 7,500 for the first time yesterday. The Dow crossed 50,000. Nvidia (NVDA) touched another all-time high near $236. And the 10-year Treasury yield climbed to 4.5%, its highest level in a year.
Both sides of this tape cannot stay right at the same time.
What matters:
Applied Materials (AMAT) posted record revenue of $7.91 billion, beat on both lines, guided Q3 well above consensus, and raised its calendar 2026 equipment growth forecast above 30%. The stock jumped roughly 6% after hours.
Cerebras (CBRS) opened at $350, hit $386 intraday, and settled at $311 on its first trading day. A 68% gain that values the company near $95 billion. The largest U.S. tech IPO since Uber.
The 10-year and 2-year Treasury yields both hit 12-month highs. Rate-hike odds for 2026 have crossed 50%.
The summit concluded Friday morning with framework language but no breakthroughs on Hormuz, chips, or tariffs. Futures are pulling back from yesterday's records.
The equity bulls have evidence.
Start with AMAT. Revenue hit $7.91 billion, a company record, up 11% year over year. Non-GAAP EPS of $2.86 cleared the $2.71 consensus. DRAM revenue rose 18%. Applied global services climbed 17% to $1.67 billion.
CEO Gary Dickerson raised the bar: semiconductor equipment spending will grow more than 30% in calendar 2026, up from the 20%-plus forecast he gave last quarter. Q3 revenue guidance came in at $8.95 billion, well above Street estimates. The company hiked its dividend 15%, its ninth straight annual increase.
The stock surged 6% after hours because the quarter left nothing to argue with. Every segment delivered. The guide accelerated.
Lam Research (LRCX), AMAT's closest peer in etch and deposition, benefits from the same tailwind. When AMAT says equipment spending grows 30%, the entire semiconductor equipment supply chain reprices. The sector is confirming what the hyperscalers signaled last quarter: AI infrastructure spend is accelerating, not peaking.
Then there is Cerebras. CBRS opened at nearly double its $185 IPO price, touched $386 before a halt, and settled at $311. That 68% first-day gain created a $95 billion company on $510 million in annual revenue and $238 million in net income.
Cerebras is profitable, which separates it from most recent tech listings. But 86% of that revenue comes from two customers. The wafer-scale chip architecture is a genuine differentiator. The customer concentration is a risk that a $95 billion valuation absorbs only if AI infrastructure demand keeps accelerating.
Whether CBRS holds above $300 through its first full week depends on the same question facing every high-multiple name: can growth premiums survive a 4.5% risk-free rate?
Between AMAT's equipment beat, NVDA at a fresh all-time high, and Cerebras doubling on debut, the AI hardware trade confirmed itself three times in one session. That is the equity case: earnings are real, demand is accelerating, and the S&P at 7,500 reflects fundamentals, not fantasy.
The bond market has a different read.
Both the 2-year and 10-year yields hit their highest levels since last May. After two consecutive inflation shocks, 3.8% headline CPI and producer prices running near 6%, the fixed-income market has eliminated rate cuts for 2026 entirely. Rate-hike odds have crossed 50% for the first time since the hiking cycle ended.
Yesterday's April retail sales added context. Spending rose 0.5% month over month, the third straight gain. But the composition told a different story. Gasoline station receipts surged as fuel prices climbed. Furniture dropped 2%. Autos slipped. Department stores fell 3.2%. Consumers are paying more for necessities and cutting back on big-ticket purchases. That is the inflation mix the Fed worries about most: household budgets squeezed without headline demand weakening enough to cool prices.
Kevin Warsh takes the chair from Jerome Powell tomorrow. He was confirmed 54-45, the narrowest margin for a Fed chair in modern history. He inherits 3.8% headline CPI, oil above $105, and equity markets priced for perfection. His first FOMC meeting is June 16-17.
That is a month of silence from the incoming chair during the most uncertain price environment in three years. The equity market assumes Warsh will be patient. The bond market is pricing the possibility that he will not.
The summit was a handshake, not a deal.
Two days in Beijing produced a "constructive relationship of strategic stability" framework, a September White House invitation for Xi, and nothing on the Strait, H200 chips, or tariff schedules. Brent is near $107 this morning. WTI is around $102. Gold slipped toward $4,650 as rising yields pulled capital toward Treasuries.
Today is Powell's last day as chair. The S&P is at 7,500. The 10-year is at 4.5%. Earnings say keep buying. Bonds say stop.
The answer comes when Warsh opens his mouth. Until then, the bond market has the better argument.