U.S. stock futures showed little movement on Thursday after global equity markets reached fresh record highs for a second straight day. Investors remain focused on the possibility of Federal Reserve rate cuts. Meanwhile, Cisco Systems delivered stronger-than-expected guidance for the current quarter, driven by growing corporate investment in artificial intelligence. Key economic data releases in the U.S. could also influence market sentiment.
Futures Show Little Direction
Futures trading suggested a pause in the market rally after equities hit record highs. By 03:49 ET, Dow futures were largely flat, S&P 500 futures were down 5 points (0.1%), and Nasdaq 100 futures had slipped 21 points (0.1%).
Wednesday saw gains across the main indexes, with the S&P 500 and Nasdaq reaching all-time highs, and the Dow Jones Industrial Average climbing more than 1%. Investor expectations of a potential Fed rate cut in September, due to moderate inflation and cooling labor market conditions, underpinned the rally.
U.S. Treasury Secretary Scott Bessent added that he “believed a more aggressive half-point rate cut by the Fed was potentially on the table due partially to sharp downward revisions to job growth in June and May.”
However, ING analysts cautioned that “markets aren’t pricing in anything over [a 25-basis point drawdown] for now,” adding that a 50-basis point cut would likely only be considered if hints appear at the Jackson Hole symposium or if the August jobs report “hugely disappoints again.”
Cisco Reports Strong Quarter
Shares of Cisco Systems (NASDAQ:CSCO) traded near the flatline in after-hours, following the company’s release of first-quarter revenue guidance that beat expectations, despite noting some effects from U.S. tariffs during its last fiscal year.
Cisco stands to benefit from a surge in corporate spending on AI, with companies like Amazon and Alphabet ramping up investments in artificial intelligence despite prior significant outlays.
CEO Chuck Robbins told investors that AI infrastructure orders in Cisco’s fiscal fourth quarter exceeded $800 million, pushing annual totals above $2 billion — more than double the initial target.
Revenue for the quarter ending July 26 reached $14.67 billion, slightly above estimates of $14.62 billion. Executives said gross profit margins were affected by a “small impact” from U.S. tariffs on copper, steel, and aluminum, describing conditions as “complex.”
Cisco projects revenue of $14.65 billion to $14.85 billion for the current quarter, surpassing the $14.62 billion analysts expected. Investors can also look forward to earnings from Applied Materials (NASDAQ:AMAT) later Thursday.
Economic Updates Awaited
Investors are also monitoring U.S. producer price data for July, which may show a slight acceleration. Analysts are watching to see if tariff-driven cost increases are offset by softer services inflation. Earlier reports indicated muted consumer price gains in July, although some observers warn that the full effects of President Donald Trump’s trade policies may emerge in the coming months.
Weekly initial jobless claims are scheduled for release, with little change expected. Policymakers continue to track labor market trends, as recent weakness could influence the Fed’s approach to resuming rate cuts that were paused in December.
DeepSeek Postpones AI Launch
The Financial Times reported that DeepSeek delayed its R2 AI model launch due to technical issues with Huawei Ascend chips. The company shifted training to Nvidia chips while keeping Ascend for inference, pushing back the release from May.
The report highlights challenges faced by Chinese AI developers in reducing reliance on U.S. technology, particularly Nvidia’s chips, despite government efforts to encourage the use of Huawei’s Ascend processors.
Bitcoin Reaches New High
Bitcoin (COIN:BTCUSD) surged to a record high on Thursday, supported by expectations of Fed rate cuts and increased corporate adoption. Lower rates free up liquidity, favoring speculative assets like cryptocurrencies.
Corporate purchases are also driving demand. Metaplanet, the world’s sixth-largest corporate Bitcoin holder, recently bought over $60 million in Bitcoin and plans to raise billions more for additional acquisitions. Earlier in August, MicroStrategy Incorporated (now Strategy) made a major Bitcoin purchase, bringing total holdings to over 628,000 coins.
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