U.S. stock futures showed little movement on Thursday, following another day of record highs across global equity markets. Investors continue to price in expectations that the Federal Reserve may soon lower interest rates. At the same time, Cisco Systems delivered stronger-than-expected guidance for the current quarter, driven by rising corporate investment in artificial intelligence. Key U.S. economic data is also scheduled for release, offering potential insights into the state of the economy.
Muted Futures Point to Potential Pause
Thursday’s futures activity suggested a calm after recent market gains, as global equities hit new record highs for a second consecutive session.
By 03:49 ET, Dow futures were essentially unchanged, S&P 500 futures had dipped 5 points (0.1%), and Nasdaq 100 futures were down 21 points (0.1%). On Wednesday, the main indexes advanced, with the S&P 500 and Nasdaq reaching all-time highs and the Dow Jones Industrial Average rising over 1%.
Investor optimism has been driven by expectations that the Federal Reserve could cut interest rates at its September meeting, amid signs of modest inflation and a softening U.S. labor market.
Adding to dovish sentiment, U.S. Treasury Secretary Scott Bessent commented 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 noted that “markets aren’t pricing in anything over [a 25-basis point drawdown] for now,” and argued that a 50-basis point option likely won’t gain traction unless hints appear at the upcoming Jackson Hole economic symposium or the August jobs report “hugely disappoints again.”
Cisco Surpasses Revenue Expectations
Shares of Cisco Systems (NASDAQ:CSCO) remained relatively flat in after-hours trading, following an upbeat revenue outlook for the first quarter, despite noting some impacts from sweeping U.S. tariffs during the just-ended fiscal year.
Cisco has emerged as a likely beneficiary of rising corporate AI spending, as companies like Amazon and Alphabet continue to expand their investments in artificial intelligence despite previous large-scale outlays.
CEO Chuck Robbins told investors during a post-earnings call that AI infrastructure orders in Cisco’s fiscal fourth quarter exceeded $800 million, bringing the annual total above $2 billion — more than double the company’s initial target.
Quarterly revenue, ending July 26, came in at $14.67 billion versus estimates of $14.62 billion. Executives acknowledged a “small impact” on gross profit margins from U.S. tariffs on copper, steel, and aluminum, describing the operating environment as “complex.”
For the current quarter, Cisco projects revenue between $14.65 billion and $14.85 billion, slightly above analyst expectations of $14.62 billion. Investors will also have the chance to review additional earnings on Thursday, including results from Applied Materials (NASDAQ:AMAT) after the closing bell.
Economic Data in Focus
Thursday brings U.S. producer price data for July, which could offer a clearer picture of inflation trends. Analysts anticipate a slight increase, possibly offsetting tariffs with soft services inflation. Earlier reports indicated broadly muted consumer price growth in July, though some observers warned that President Donald Trump’s aggressive trade agenda might have delayed effects in coming months.
Weekly initial jobless claims are also set for release, with expectations of little change. Policymakers continue monitoring labor market trends closely, as recent softening may influence the Fed’s approach to resuming rate cuts paused in December.
DeepSeek Postpones New AI Model
According to the Financial Times, DeepSeek has delayed the launch of its R2 AI model due to technical problems encountered when training on Huawei Ascend chips. The company switched to Nvidia chips for training while retaining Ascend for inference, causing the delay from the original May release.
The report emphasizes the challenges Chinese AI developers face in reducing reliance on U.S. technology, especially Nvidia’s chips, despite government encouragement to use Huawei’s Ascend processors earlier this year.
Bitcoin Hits Fresh Record
Bitcoin (COIN:BTCUSD) reached a new all-time high on Thursday, buoyed by expectations of Fed rate cuts and increased corporate adoption. Lower interest rates free up liquidity for speculative assets, benefiting cryptocurrencies.
Corporate buying also supported Bitcoin. Metaplanet, the world’s sixth-largest corporate Bitcoin holder, recently purchased over $60 million in the cryptocurrency and plans to raise billions more to expand holdings. Earlier in August, MicroStrategy Incorporated (now Strategy) made a major Bitcoin acquisition, bringing its total holdings to more than 628,000 coins.
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