These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a positive start to the trading day. Given the timing of Thursday’s July PPI report, you will want to revisit those equity futures before the market open.
1. Treasuries advanced and stocks traded near record highs as oil prices fell and traders awaited US producer-price data for further clues on the path of Federal Reserve interest rates… Attention later in the day will turn to producer price data, which can serve as a leading indication of consumer inflation. Traders will also be watching the results of a 30-year Treasury auction, with the $25 billion offering tipped to price at the highest interest rate in 25 years… (Bloomberg)
The Strait of Hormuz is “under Iran’s control and management” according to the appointed head of Iran’s Basij paramilitary unit, while President Donald Trump commented that the U.S. has “total control” of the waterway, so things are at a standstill with the market looking to see what may happen next.
2. The Bureau of Labor Statistics is set to release the producer price index for July at 8.30 a.m. Eastern time. Economists expect the data to show that wholesale inflation rose 4.9% last month, down from a 5.5% increase in June. The print matters because investors are still trying to figure out the Fed’s next move. Consumer-price inflation cooled to 3.4% in July, data released Wednesday showed, bolstering the case for the central bank to hold rates at its Sept. 16 policy meeting. (Barron’s)
We will quickly repeat the comments we shared ahead of Wednesdays July CPI report: given the move up in oil prices over the last few weeks, we are more interested in what the inflation commentary will be in the Flash August PMI report from S&P Global later this month. We recognize that an in-line or softer July PPI print will lift the market, potentially extending the increasingly giddy market mood we discussed on Wednesday.
3. Anthropic investors expect the AI start-up to float at a valuation of $2tn or more in October, a dizzying figure that would eclipse SpaceX and make the AI lab’s debut the largest ever initial public offering. Half a dozen of the company’s backers told the FT that Anthropic’s rapidly rising revenue would enable it to more than double its current valuation in a planned autumn float. A listing at that level could unlock billions of dollars in gains for the five-year-old company’s early investors but would also test public markets that are growing more nervous about the AI boom. (FT)
Not having seen Anthropic’s S-1 only because it hasn’t landed yet at the SEC website, it’s difficult to comment on that speculated $2 trillion valuation. We’ll need to read through that filing and the financial information presented. One of the areas that folks will focus on will be profitability and cash flow, especially after reading through the S-1 filing for SpaceX (SPCX). Similar to SpaceX’s IPO roadshow, the one for Anthropic will also be focused on those topics and prospects for bolstering both in the coming quarters. Other topics of interest will no doubt be multi-year capex plans and other revenue streams.
Once we have read the S-1 filing from Anthropic, we’ll have some incremental thoughts to share, including implications for OpenAI, our position in Neostellar Capital (NSLR) and other Portfolio companies investing in OpenAI.
4. Cisco Systems is the latest tech hardware company to report strong financial results driven by ongoing artificial-intelligence demand. Cisco reported adjusted earnings of $1.22 a share on revenue of $17.3 billion for the fiscal fourth quarter ended on July 25. Cisco’s networking segment — which includes gear used in AI data centers — has grown as enterprise demand for AI infrastructure continues to rise. Networking revenue was $9.79 billion in the period, higher than the $9.66 billion that analysts expected and marking a 28% increase from last year. When reporting third-quarter earnings in May, the company said it had taken $5.3 billion in AI infrastructure orders from hyperscalers so far in the fiscal year, which led Cisco to then raise its full-year expectations for orders to $9 billion, up from $5 billion. On Wednesday, Cisco reported fiscal 2026 AI infrastructure orders were $9.3 billion, which was ahead of those estimates. (Barron’s)
In response to those figures, Cisco (CSCO) shares are falling on Thursday morning, and that move is being traced back to two things in particular. The company’s gross margin for the quarter came in at 66.3%, down from 68.4% last year, largely due to pressure on product gross margins. Those pressures are tied to the rising cost of components used in AI hardware, like memory. Second, whisper numbers. We’ll have more to say on that with our next item.
Before we get there, however, we’ll point out that on its earnings call, Cisco said it sees $7.5 billion in AI-related revenue from the hyperscalers in the coming 12 months of 2027 and that orders from the group were up more than 100% in the reported quarter. That, along with the comments above for Cisco’s networking revenue, bodes well when our AI and data center chip positions report their quarterly results in the coming weeks. That ramping demand also points to continued tight chip capacity, setting the stage for quarterly results after Thursday’s market close from Applied Materials (AMAT).
5. Cerebras Systems Inc. slid in premarket trading after it projected slower growth than some investors anticipated, a sign the company is still in the early stages of popularizing a novel chip design. Revenue will be about $215 million in the current quarter, Cerebras said in a statement Wednesday. Though that topped the $212 million average estimate, some predictions exceeded $220 million, according to data compiled by Bloomberg. Given the massive spending on data center technology, investors may have expected more of that money to show up in Cerebras’ sales… (Bloomberg)
Following on our comment above for CSCO shares, here too, expectations of explosive demand have arguably become exuberant, frothy, giddy or whatever you want to call given the move in stocks like Cerebras (CBRS). While well off their IPO price, heading into the company’s earnings report on Wednesday night, the shares were up some 55% off their July 29. The market’s reaction to earrings from Cisco and Cerebras support the growing market concerns we shared with you on Wednesday afternoon.
As we discuss the topic of whisper numbers and stocks running into their quarterly earnings report, we’ll note that AMAT shares have climbed around 25% since their July 29 low. Applied is expected to deliver EPS of $3.39 on revenue of $9 billion of its July quarter and guide its October quarter to EPS of $3.68 on $9.54 billion. Where things could get tricky is the high end of Wall Street forecasts are calling for EPS of $4.06 on revenue of $10.3 billion for the October quarter.
Coming off the market’s reaction other CSCO and CBRS earnings, we would not suggest folks chase AMAT shares into Thursday night’s earnings report.
6. China’s Lenovo Group reported a 43% jump in quarterly revenue on Thursday, beating forecasts to drive shares up as much as 22%, as the world’s largest computer maker rides an AI hardware boom and benefits from a global memory chip shortage. Lenovo’s revenue rose to $26.94 billion in the three months ended June 30, beating analyst expectations of $22.3 billion, as the consumer electronics hardware giant benefited from artificial intelligence-driven demand and solid PC sales… Its AI server pipeline reached $54.0 billion, up 157% quarter-over-quarter, reflecting demand from hyperscalers, AI cloud and enterprise AI clients, it said in the earnings report. (Reuters)
In response we are seeing shares of HPE (HPE) and Dell (DELL) move higher on Thursday morning, but the read through for us is another constructive data point for AI and data center chip sales following hyperscaler and neocloud capital spending revisions.
7. Economic data today per TipRanks: PPI (July), Initial and Continuing Jobless Claims (Weekly), EIA Natural Gas Inventories (Weekly).
8. Companies reporting today per TipRanks: Open: Applied Industrial (AIT), Bending Spoons (BSP), Birkenstock (BIRK), MSG Sports (MSGS), Nomad Foods (NOMD), Tapestry (TPR). Close: Applied Materials (AMAT).
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At the time of publication, TheStreet Pro Portfolio was long AMAT and NSLR.
