Wall Street banks see warning signs but say don't bet against the AI rally — mixed news for stock investors, with risks building but momentum still strong.

• Citi flags tech fatigue: Applied Materials beat earnings but stock did not rally, a sign the AI hardware trade may be overheated.
• Government bond yields jumped past key levels as inflation worries return and the US-Iran standoff drags on, which could hurt stocks.
• The China trade visit produced almost nothing because Xi Jinping has leverage while the US is stuck dealing with Iran; a UAE nuclear plant was hit by a drone this morning.
• Goldman says don't fight the rally — retail trading is up 28% since mid-April and tech exposure is at the highest level since early 2024.
• Hardware companies like Meta and Google have cut stock buybacks sharply to fund AI data centers, removing a key support for the market.
• The SpaceX IPO is about a month away and Anthropic just raised $30 billion at a $900 billion value, which keeps pumping the AI hardware cycle.

Outlook: Expect more volatility, with the Cerebras IPO likely falling further and hardware running through the SpaceX IPO before money rotates into software stocks around July or August.