Yahoo Finance’s Laura Bratton reports:

Apple (AAPL) stock was downgraded to Hold from Buy by Needham analysts who said the stock is overvalued amid growing AI competition.

Analyst Laura Martin explained in a note to clients Wednesday that Apple is currently trading at a more expensive multiple than it has historically, just as the rise of generative AI threatens to disrupt the iPhone maker’s businesses.

Wall Street tech bull Dan Ives is putting his AI conviction to the test.

On Wednesday, Wedbush Fund Advisers launched the Dan IVES Wedbush AI Revolution ETF, which will trade on the New York Stock Exchange under the ticker symbol IVES. The new exchange-traded fund is built on Ives’s proprietary research and aims to provide investors with targeted exposure to the booming artificial intelligence sector.

“The AI revolution is the biggest tech theme we’ve ever seen,” Ives told Yahoo Finance in a phone interview following the announcement. “I’ve started [this] ETF because it’s about the second, third, fourth derivatives of AI playing out, and that’s the important thing for investors.”

The fund tracks 30 publicly traded companies handpicked from Ives’s “AI Revolution Theme,” a research framework that identifies firms with meaningful exposure to AI infrastructure, deployment, and monetization.

The ETF spans a range of sectors, including semiconductors, hyperscalers, cybersecurity, consumer platforms, robotics, and cloud infrastructure. Holdings include major AI players like Nvidia (NVDA), tech giants such as Microsoft (MSFT), and defense-focused firms like Palantir (PLTR). Chinese companies Alibaba (BABA) and Baidu (BIDU) are also featured to capture exposure to AI developments in Asia.

Reflecting on his investment approach, Ives explained, “I’ve never been too focused on valuations. It’s about the themes, the best places, and the disruptors. That’s all the work we do in the field.”

Read more here.

The 10-year Treasury yield (^TNX) and the 30-year Treasury yield (^TYX) both fell about 8 basis points as investors digested a slew of weaker-than-expected economic data..

On Wednesday, data from ADP showed private payrolls grew by just 37,000 in May, far fewer than the 114,000 expected by economists and below the 60,000 new jobs added in April. This marked the smallest increase in private payrolls since March 2023.

In another sign that tariff uncertainty is weighing on economic data, the Institute for Supply Management’s Services PMI registered a reading of 49.9 in May, below the 51.6 seen in April and lower than the increase to 52 economists had expected. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. May’s data marked just the fourth time the services sector has fallen into contraction in the past five years.

Read more about the economic data releases from Wednesday morning here.

Yahoo Finance’s Pras Subramanian reports:

Read more here.

Activity in the services sector has fallen into contraction for the first time in a year.

The Institute for Supply Management’s Services PMI registered a reading of 49.9 in May, below the 51.6 seen in April and lower than the increase to 52 economists had expected. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. May’s data marked just the fourth time the services sector has fallen into contraction in the past five years.

New orders tumbled to a reading of 46.4 in May, below the 52.3 seen the month prior. Meanwhile, the prices paid index increased to 68.7, up from 65.1 in April. This marked the highest prices paid reading since November 2022, when the Consumer Price Index had shown inflation at 7.1%.

Steve Miller, the chair of ISM’s Services Business Survey, said in the release that “Tariff impacts are likely elevating prices paid.”

“May’s PMI level is not indicative of a severe contraction, but rather uncertainty that is being expressed broadly among ISM Services Business Survey panelists,” Miller said. “The average reading of 50.8 percent over the last three months still indicates expansion in that time period, but it is a notable shift of 2 percentage points below its average of 52.8 percent over the previous nine months.”

US stocks inched higher on Wednesday as Wall Street digested a sharp slowdown in private-sector hiring growth, with one eye on prospects for US-China trade talks as a steel tariff hike kicked in.

The S&P 500 (^GSPC) rose about 0.2%, while the Dow Jones Industrial Average (^DJI) added over 0.1%. The tech-heavy Nasdaq Composite (^IXIC) gained more than 0.2% to build on the major indexes’ strong start to the week.

On Wednesday, data from ADP showed private payrolls grew by just 37,000 in May, far fewer than the 114,000 expected by economists and below the 60,000 new jobs added in April. This marked the smallest increase in private payrolls since March 2023.

“The weak numbers we’re seeing now does not point to a labor market that’s collapsing, but there is hiring hesitancy,” ADP chief economist Nela Richardson said on a call with reporters.

President Trump posted about the numbers on Truth Social shortly after the release.

“ADP NUMBER OUT!!! “Too Late” Powell must now LOWER THE RATE,” Trump posted. “He is unbelievable!!! Europe has lowered NINE TIMES!”

Read more here.

When it comes to Apple stock both the bull and the bear cases are unfazed by tariffs, despite the fact these levies and presidential threats could deflate the company, bull and bear arguments tend to focus on the tech company’s well established products and competitor advantage.

Despite the political landscape changing for Apple CEO Tim Cook, for Wall Street the story remains the same.

The bull case is focused on strong earnings, a legacy built on underpromising and overdelivering. Delivering stable results and always managing expectations. But this may be hard to see now.

My colleague, Yahoo Finance’s senior reporter Hamza Shaban looks at why Apple bull and bear cases don’t see tariffs changing the story.

Here are some top stocks trending on Yahoo Finance in premarket trading:

CrowdStrike (CRWD) stock fell over 6% before the bell on Wednesday after the technology company forecast Q2 earnings below estimates, indicating weaker government spending on cybersecurity products.

HPE (HPE) beat Wall Street estimates for second-quarter revenue and profit on Tuesday, due to strong demand for its artificial-intelligence servers and hybrid products. The groups stock price was up 5% before the bell on Wednesday.

Robinhood (HOOD) stock rose over 1% in premarket trading on Wednesday. Nearly four years after its much-hyped debut, Robinhood Markets Inc. has finally seen its shares hit a fresh record as cryptocurrency markets rally. Robinhood’s stock rose over 5% on Tuesday and closed at $71.72, beating its previous high of $70.39, which was set days after the online brokerage’s IPO.

Wells Fargo (WFC) shares were up 3% before the bell today after the Federal Reserve a major restriction on the investment bank, meaning it will no longer have to operate under a $1.95T asset cap.