Markets spent last week discovering that expensive technology shares, rising bond yields and $100 oil don’t always make comfortable bedfellows.

Markets began the week looking fairly comfortable and finished it hiding behind the sofa. The S&P 500 lost 1.6%, closing Friday at 7,475.69, while the Nasdaq dropped 2.9%. The trouble centred on technology, where enthusiasm over AI spending collided with concerns that cheaper Chinese models could challenge America’s expensive infrastructure boom.

Markets spent the week doing what they do best: ignoring danger until it becomes expensive. The S&P 500 gained 1.2% and finished at 7,575.39, while the Nasdaq added 1.7%, as enthusiasm for AI and semiconductors outweighed another bout of Middle East anxiety.

This week had that slightly odd “risk-on, but don’t get cocky” feel about it. The S&P 500 started strongly, with Monday’s 1.17% rally helped by tech buying and relief that the U.S.–Iran situation hadn’t blown up again.

This past week had that familiar feel of a market trying to look calm while quietly checking the exits. The S&P 500 slipped around 2% over the past week, breaking its recent winning rhythm, while the Nasdaq took a heavier 4.6% hit as investors finally started taking some money off the AI table.

Markets spent the week trying to decide whether to celebrate falling risk or worry about why risk was falling in the first place. The S&P 500 pushed higher overall, helped again by the same old crowd: AI, mega-cap tech, and the belief that the Fed is still closer to cutting than tightening.

Markets had plenty to chew over this week, and for once it wasn’t just another “AI goes up, everything else watches” story. The S&P 500 pushed higher, helped by tech resilience, calmer bond markets, and investors still willing to buy the dip whenever panic fails to appear.

Markets spent the first few days of June pretending everything was fine. Then Friday arrived, kicked the door open, and reminded everyone that rallies built on narrow leadership can fall over very quickly when the crowd all reaches for the exit at once.

Markets ended May with a bit of swagger, though we wouldn’t confuse swagger with safety. The S&P 500 pushed to fresh record territory, helped by another burst of enthusiasm around AI, solid earnings…

This past week felt like one of those markets where everyone wanted to be bullish, but nobody wanted to admit they were nervous. The S&P 500 finished near 7,473, up roughly 0.9% on the week, giving it an eighth straight weekly gain.