The 30-Second Setup

Futures Snapshot

Stock futures are firmly green this morning, with Nasdaq 100 futures leading the charge up about 0.5%, S&P 500 futures up 0.2%, and Dow futures adding roughly 176 points or 0.4%. The bid is driven by a single-name detonation in Cisco, generally constructive Trump-Xi headlines, and the market's now-standard ability to ignore bond yields trading near year-to-date highs at 4.46%. The 2-year yield sits at 3.97%, with the CME FedWatch tool still pricing a 98.6% chance the Fed sits on its hands in June. [Benzinga]

Overnight & Asia Recap: The Trump-Xi Show, Reviewed

The big overnight story was Trump and Xi holding what Beijing officially branded "the biggest summit," with both leaders signaling progress on U.S.-China ties while keeping Taiwan as the predictable sticking point. Xi pointedly told Trump that Taiwan remains "the most critical matter" in bilateral relations — a polite diplomatic way of saying "please stop selling them weapons" — while the U.S. side reportedly approved Nvidia's H200 AI chip sales to a list of Chinese firms including Alibaba and Tencent. Markets read that as a meaningful thaw. [Stocktwits]

Goldman Sachs framed the summit as "a tactical catalyst for strength in the Chinese yuan and Chinese equities," with expectations that China would commit to more U.S. agriculture, energy, and aircraft purchases in exchange for an avoidance of further tariff escalation. No grand bargain, but enough of a vibe shift that BABA was last seen up 8.18% in pre-market on the H200 news. The on-the-ground delegation read like a who's-who of corporate America — Tim Cook, Elon Musk, and a last-minute jet-on addition of Nvidia CEO Jensen Huang, who reportedly hopped Air Force One in Alaska. [CNBC]

Asia closed mixed but constructive. Tokyo's Nikkei 225 climbed, the Hang Seng got a boost from the Nvidia headlines and AI optimism, and Chinese mainland indexes pushed higher into the summit's afterglow. The Strait of Hormuz is still shut and oil supply is still constrained, but for one morning at least, the market would prefer to talk about AI capex than about missiles. [Investing.com]

The Iran War: Quiet Doesn't Mean Calm

The U.S.-Iran ceasefire is technically still alive, but only in the way a houseplant you forgot to water is still alive. Trump declared earlier this week that the truce is on "massive life support" and called Iran's most recent proposal "a piece of garbage." Defense Secretary Hegseth, helpfully, reminded everyone that the 60-day War Powers clock has expired and that Trump doesn't need congressional approval to resume strikes — comments the bond market has been pricing as a permanent oil floor. [Yahoo Finance]

Oil is finally getting some relief this morning, however, with WTI off about 2% to around $100 and Brent dropping below $104, after the IEA and OPEC released monthly oil reports that pointed to softer-than-feared demand and signs of supply adjustments. Saudi Aramco has still been warning that ~100 million barrels a week of supply is being lost from the Hormuz shutdown, so anybody pricing oil for a sustained move below $95 is doing so on hope, not headlines. [NYSE Market Commentary]

What Moved Markets Yesterday

Wednesday was a study in selective deafness. April PPI came in at a frankly hideous +1.4% MoM and +6.0% YoY — the largest jump since April 2022 and roughly triple the +0.5% headline estimate. Core PPI surged 1.0% MoM (consensus was 0.3%). The 10-year yield touched 4.48%, its highest of 2026. And yet the S&P 500 still managed to climb 0.58% to a new closing record of 7,444.25, while the Nasdaq Composite hit a fresh record of 26,402.34, up 1.2%. The Dow lagged, slipping 67 points to 49,693.20. [CNBC]

How did stocks rally on a brutal inflation print? Tech, tech, and more tech. Nvidia closed up over 2%, Micron added 4%+, and the VanEck Semiconductor ETF (SMH) gained 2%. Apple touched $300 for the first time ever. Roughly two-thirds of the S&P 500 actually finished lower on the day — this was an extraordinarily narrow rally, with the AI complex bullying the index into the green while the rest of the market quietly bled. Retail and banking sectors took the brunt of inflation fears. [CNBC]

The Cisco Bomb (The Good Kind)

After the bell, Cisco threw a kitchen sink at Wall Street and Wall Street licked the plate. Q3 revenue came in at $15.84B vs. $15.56B expected; adjusted EPS hit $1.06 vs. $1.04 consensus. Revenue grew 12% YoY. Networking orders were up more than 50% on hyperscaler demand. Management raised FY26 revenue guidance to $62.8-63.0B (from $61.2-61.7B) and FY26 AI infrastructure order expectations to nearly $9 billion, up from the prior $5B+. Q4 EPS guide is now $1.16-$1.18 on $16.7-16.9B revenue, well ahead of Street. [CNBC]

Cisco also announced a roughly 4,000-person layoff (under 5% of workforce) tied to a broad AI-focused restructuring, with charges of about $450M in fiscal Q4. CEO Chuck Robbins framed it as a resource reallocation rather than a cost-cut play. Whatever you call it, CSCO was last seen up 18.8% in pre-market trading — on track for its sharpest rally since 2002 if it holds through the session. The AI-networking thesis just got a very public stamp of approval. [Benzinga]

Crypto Corner: Stuck in the $80K Mud

Bitcoin is having a quiet morning, trading around $79,549 after testing the $80,000 resistance zone yet again and bouncing off it like a tennis ball off concrete. Ethereum is roughly flat near $2,300. The asset class continues to grind sideways with very little conviction — institutional ETF flows have been positive but unspectacular, and the macro setup (rising yields, hot inflation, geopolitical risk) is doing crypto no favors. [LatestLY]

The technical setup remains a textbook range trade. The $80,000 level has been functional resistance for weeks now; the $76,000-$77,000 zone has been buy-the-dip support. Until one of those breaks decisively, this looks more like a parking lot than a market. Notable catalyst worth watching: Kevin Warsh, the incoming Fed Chair, is described by some on Capitol Hill as a "crypto-linked investor" — though Senator Warren has already called him Trump's "sock puppet," so any policy tailwind is going to come with political baggage attached. [CoinDesk]

Pre-Market Movers to Watch

Applied Materials reports after the close and will be the next read on whether the semiconductor capex boom is for real or just a story. Look for commentary on China demand, given the H200 news, and any guide for HBM-related equipment shipments. A miss here would seriously test the "tech can ignore everything" thesis. [Benzinga]

High-Impact Economic Releases — Rest of This Week

The 8:30 AM Retail Sales report is the headline event before the bell. After yesterday's PPI shock, this is the first hard data point on whether the consumer is still showing up at the register despite $4+ gasoline and a CPI print at a three-year high. A weak number reinforces the stagflation chatter; a strong number gives the Fed even more cover to stay parked. Either way, the bond market will react first, and equities will follow. [CNBC Week Ahead]

The 5:45 PM appearance from NY Fed President John Williams is the other event to circle. Williams is consistently one of the most market-moving FOMC voices, and this will be his first major commentary since the PPI shock and the Warsh confirmation. Markets are currently pricing roughly a 28%+ chance of a rate hike by the December meeting — a number that could move sharply in either direction depending on his tone. [MEYKA AI]

The Bottom Line

"More AI. More efficiency. More cuts. That is the 2026 corporate playbook in three lines." — MEYKA AI on Cisco's restructuring. Hard to argue.