Cisco drives Wall Street higher, ASX set to rise
Stan Choe
The US stock market is soaring towards more records after Cisco Systems joined the ranks of US companies reporting higher profits than analysts expected at the start of 2026.
The S&P 500 rose 0.8 percent to its all-time high set the day before. The Dow Jones index rose 383 points, or 0.8 percent, and was on track to finish the day above 50,000 points for the first time since the start of the war with Iran. The Nasdaq composite rose 0.9 percent, breaking its own record with an hour left in trading.
The Australian share market will move higher, with futures pointing to a gain of 59 points, or 0.7 per cent, when it opens at 5.02am (AEST). The ASX broke a four-session losing streak on Thursday, rising 0.1 per cent. The Australian dollar was trading at 72.27¢.
Cisco helped lead the market after reporting better profits and revenue than analysts expected in the latest quarter. Shares of the tech giant rose 13 percent and CEO Chuck Robbins said he was seeing “very strong, broad-based demand for our products.”
Major tech giants in particular are pouring money into AI technology, and Cisco gave a profit forecast for the current quarter that easily beat analysts’ expectations.
Such insatiable demand for artificial intelligence and the huge profits it generates have been the main reasons why the US stock market has broken records throughout this year. Cerebras Systems, an artificial intelligence processor company, raised US$5.55 billion ($7.7 billion) after selling its shares in an initial public offering, sending its shares up 72 per cent in its Nasdaq debut.
Corporate earnings announced so far this season have “reinforced that this is still an AI-led market, but one where influence is rapidly expanding,” according to Gargi Pal Chaudhuri, chief investment and portfolio strategist at BlackRock.
“What started with a handful of companies is now driving earnings growth in semiconductors, infrastructure and even parts of the industrial economy,” he said.
Apart from AI, other stocks that rose after reporting better-than-expected earnings included StubHub Holdings, up 15.3 percent, Viking Holdings, up 6.4 percent, and Yeti Holdings, up 7 percent.
All three companies sell non-daily necessities, such as concert tickets, river cruises and insulated water bottles. The strong results from these may be an indication that U.S. consumers are still willing to spend, even though they say in surveys they are discouraged about the economy.
Whether US households will continue to spend and support the economy is a big question as pressure on them increases due to high oil prices and inflation created by the Iran war. Shoppers spent less at U.S. retailers last month than economists expected, a report released Thursday said. But after accounting for gasoline and auto sales, the slowdown wasn’t as bad as economists thought.
Meanwhile, a separate report said more U.S. workers applied for unemployment benefits last week, which could indicate more layoffs. However, the number remains relatively low compared to history.
Treasury yields fluctuated up and down in the bond market immediately following the reports, but remained largely steady. The yield on the 10-year Treasury note remained at 4.46 percent late Wednesday.
In foreign stock markets, indices rose in Europe following the mixed closing in Asia. While Japan’s Nikkei 225 index fell 1 percent, South Korea’s Kospi rose 1.8 percent to a new record, thanks to gains in artificial intelligence-related stocks.
Stocks were nearly flat in Hong Kong and fell 1.5 percent in Shanghai after Chinese leader Xi Jinping met with US President Donald Trump in Beijing.
Some investors hope Trump can encourage Xi to use China’s close economic ties with Iran to reopen the Strait of Hormuz. The war-related closure of the strait caused oil tankers to remain in the Persian Gulf instead of distributing crude oil to customers around the world, which increased crude oil prices.
The price of a barrel of Brent crude, the international standard, rose 0.1 percent to $105.72 on Thursday, well above its pre-war price of about $70.
