Closing Look - 8/12/26

🟢 Stocks edged to fresh records Wednesday as a July CPI print that matched expectations eased Fed rate-hike fears and a wave of blowout AI-infrastructure earnings powered neocloud stocks sharply higher.

Headline CPI cooled to +3.4% year-over-year from June’s 3.5%, with core CPI easing to +2.5%.

The Nasdaq Composite led major indices with a +0.54% gain, while the S&P 500 added +0.26% and the Dow slipped -0.04%, dragged by a handful of defensive names.

CoreWeave (CRWV), Super Micro Computer (SMCI), and Nebius Group (NBIS) all posted blowout results, with NBIS rocketing +34% on booming AI cloud demand.

After the closing bell, Cisco Systems (CSCO) beat on every line and issued fiscal 2027 guidance that towered above Wall Street’s estimates, yet shares fell as investors took profits after a huge year-to-date run.

Oil held firm near $89 a barrel as the Strait of Hormuz standoff between the US and Iran dragged into another day, and the VIX settled near a multi-month low at 14.55.

• 🟢 Russell 2000 +0.61% to 3,045.48

• 🟢 Nasdaq Composite +0.54% to 26,588.49

• 🟢 S&P 500 +0.26% to 7,748.50

• 🔴 Dow Jones Industrial Average -0.04% to 53,770.27

• 🟢 Eight of 11 S&P 500 sectors traded higher, with information technology leading; the Dow’s fractional loss was driven by a handful of defensive and legacy-tech names rather than broad selling

• 🟢 NBIS beat Q2 revenue estimates at $582.3M, reaffirmed 2026 guidance, and raised its contracted power target to 5 GW; the company also announced a compute deal with Reflection AI worth more than $1B through 2029. NBIS soared +34.0% to roughly $246.70.

• 🟢 SMCI topped fiscal Q4 earnings estimates as gross margin nearly doubled to 17.5% from 9.5% a year ago, and guided fiscal 2027 revenue as high as $72B on more than $60B in new orders over the past year. SMCI jumped +20.5% to $38.09.

• 🟢 CRWV reported Q2 revenue of $2.6B, up 112% year-over-year, and raised its full-year revenue, adjusted operating profit, and capex forecasts as its backlog grew to $104.2B from $99.4B three months earlier. CRWV surged +19.7% to $108.09.

• 🔴 CSCO beat on every metric for fiscal Q4, posting revenue of $17.3B (+18% year-over-year) and non-GAAP EPS of $1.22 versus a $1.17 estimate. AI infrastructure orders hit $4B in the quarter, bringing the fiscal 2026 total to $9.3B, above the company’s raised $9B target. Fiscal 2027 guidance of $5.05–$5.11 EPS and $72.2B–$73.4B revenue came in well above Street estimates near $4.28 EPS and $62.9B. Despite the beat-and-raise, CSCO fell as much as -5% in after-hours trading before paring losses, a “sell-the-news” reaction after a 57% year-to-date run.

• 🔴 Coherent Corp. (COHR) also beat Q4 estimates, posting adjusted EPS of $1.74 on revenue of $2.05B (+34% year-over-year), and guided fiscal Q1 2027 revenue to $2.2B–$2.4B. COHR slid roughly -4% after hours despite the strong print.

• 🔴 Additional notable: Alibaba (BABA) -1.8%; McDonald’s (MCD) -1.1%; IBM -1.0%; Microsoft (MSFT) -1.0%.

• 🟢 The CRWV, SMCI, and NBIS results (see Earnings) reinforced that AI infrastructure spending is accelerating rather than slowing, with combined hyperscaler AI capex tracking above $730B for the year.

• 🟢 CSCO’s fiscal 2026 AI infrastructure orders reached $9.3B, above its raised $9B target, underscoring continued networking demand tied to the AI buildout (see Earnings).

• 🟢 Bloom Energy (BE) jumped as much as +15.0% after Nebius said on its earnings call it would deploy Bloom fuel cells to help power its data centers.

• 🟡 Nvidia (NVDA) traded roughly flat on the session as investors rotated into the day’s earnings winners; the stock remains in focus ahead of its own fiscal Q4 report later this month.

• 🟢 Singapore’s Temasek disclosed fresh stakes in SK Hynix and Samsung, adding to overnight strength in Asian AI-chip suppliers (see Foreign Markets).

• 🟡 Wall Street analysts issued an active slate of upgrades and downgrades Wednesday spanning Merck (MRK), Hilton (HLT), Marriott (MAR), Okta (OKTA), Entegris (ENTG), Novo Nordisk (NVO), Gap (GAP), and Intuitive Surgical (ISRG).

• 🟢 RTW Biotech Opportunities’ private portfolio company Avere Therapeutics agreed to merge with NextCure (NXTC) in an all-stock transaction expected to close by year-end.

• 🟡 Nasdaq Inc. (NDAQ) agreed to acquire LeveL Markets, one of the largest US Alternative Trading Systems, as part of a push to build “always-on” markets; terms were not disclosed.

• 🟡 Nothing further to report on index composition changes or trading-rule shifts today.

• 🟢 July CPI rose +0.1% month-over-month and +3.4% year-over-year, matching consensus and cooling from June’s 3.5%. Core CPI rose +0.2% monthly and +2.5% annually, also in line with estimates.

• 🟢 Gasoline prices fell -2.9% and shelter costs rose just +0.1%, the smallest gain of the current cycle; grocery prices dipped -0.1%.

• 🟢 Fed September rate-hike odds eased following the report (see Prediction Markets); July PPI is due Thursday and will be the next major test for the rate path.

• 🟢 2-Year yield fell 4 bps to 4.178%

• 🟢 10-Year yield fell 3 bps to 4.654%

• 🟢 30-Year yield fell 2 bps to 5.217%

• 🟡 The 2s10s spread widened modestly to roughly +48 bps, still comfortably positive; a 30-year bond auction Wednesday afternoon offered a fresh read on demand for long-dated debt

• 🔴 The Strait of Hormuz remains effectively closed; Iran’s newly appointed Supreme National Security Council secretary said the waterway will stay shut until the US changes its stance and meets Iran’s conditions to end the war.

• 🔴 Deadly attacks on vessels in the Red Sea and Gulf of Oman heightened concerns over shipping-route risk, keeping a geopolitical premium embedded in oil prices (see Commodities).

• 🟡 President Trump warned of further consequences should attacks on Iranian power infrastructure continue, even as Pakistan’s defense minister said Washington and Tehran remain “close to some sort of arrangement” on reopening the strait. No breakthrough materialized Wednesday.

• 🟡 South Korea’s Kospi surged roughly +3.7%, an outsized move tied to overnight strength in chipmakers after Temasek’s new stakes in SK Hynix and Samsung (see AI) — well above the index’s typical daily range and worth flagging as an outlier.

• 🟢 Japan’s Nikkei 225 rose +0.83% to 67,524.06

• 🟢 China’s Shanghai Composite added +0.32% to 3,946.68

• 🔴 The UK’s FTSE 100 eased -0.1% to 10,833.15, its third straight lower close, as Middle East caution offset the in-line US inflation data

• 🔴 Germany’s DAX slipped -0.23% to 26,331, giving back an intraday record above 26,574 as investors booked profits

• 🔴 France’s CAC 40 fell -0.46%

• 🔴 Hong Kong’s Hang Seng fell -0.83% to 25,440.17

• 🟡 DXY firmed modestly to roughly 99.9, up about +0.1%, after an initial CPI-driven dip fully reversed into the close

• 🟡 USD/JPY rebounded to the mid-159.00s, up roughly +0.3%, after dipping to 158.60 post-CPI; the pair remains close to the 159.50–160 zone that FX analysts flag as intervention-sensitive

• 🔴 GBP/USD slipped back below 1.3500, down roughly -0.2%, giving back an earlier advance toward 1.3550

• 🔴 EUR/USD eased to roughly 1.1520, down about -0.2%, as the dollar regained footing into the close

• 🟢 Silver jumped +3.06% to $66.56/oz — a notably outsized move versus its typical ~1% daily range, driven by the cooler-CPI, softer-dollar reaction

• 🟢 WTI crude settled at $83.27, roughly flat, near its highest closing levels since July 31

• 🟢 Brent crude rose modestly to settle at $88.98, little changed on the day but holding just below $90 on Strait of Hormuz risk

• 🟡 Gold was little changed near $4,469/oz, giving back part of an earlier advance toward $4,470 as the dollar firmed into the close

• 🔴 Bitcoin (BTC) slipped -0.30% to $63,414, dipping briefly to around $63,480 in a knee-jerk reaction to the CPI print before stabilizing

• 🟢 Polymarket’s September Fed rate-hike contract eased to roughly 36% as the in-line CPI report reduced the odds of a hike; CME FedWatch pricing similarly fell to about 38% from 48% the prior day (see Macro/Policy)

• 🟢 VIX settled at 14.55, down -4.78%, a notably low level signaling calm ahead of Thursday’s PPI report

• July PPI, 8:30 AM ET

• Weekly initial jobless claims, 8:30 AM ET

• Fed’s Barkin speaks

• Results from the 30-year Treasury bond auction

🟢 Bullish: A soft PPI print reinforces the disinflation narrative, Strait of Hormuz talks show tangible progress, and AI-infrastructure momentum from CRWV, SMCI, and NBIS carries into the broader tech complex, pushing the S&P 500 to fresh records above 7,760.

🟡 Neutral: PPI comes in mixed, the Hormuz standoff persists without fresh escalation, and markets digest CSCO’s beat-and-raise-but-sell-the-news dynamic, leaving major indices to trade in a tight range near record highs.

🔴 Bearish: A hot PPI print reignites September hike bets, renewed Hormuz escalation lifts oil and the dollar sharply, and profit-taking spreads from CSCO and COHR into the broader AI trade, pressuring growth stocks into Thursday’s open.

Wednesday was a story of two markets working in tandem.

An in-line CPI report gave the Fed room to stay on hold, and traders responded by trimming September hike odds and buying growth stocks.

Layered on top was a genuine AI-infrastructure earnings blowout, with CRWV, SMCI, and NBIS all delivering results strong enough to reset expectations for the neocloud trade.

CSCO’s after-hours stumble despite a clean beat-and-raise is a reminder that with AI names up so much this year, even great numbers aren’t always enough.

Oil, the dollar, and the Strait of Hormuz standoff remain the swing factors heading into Thursday’s PPI print, which will be the next real test of whether the disinflation story can hold.

Sources: CNBC, Reuters, Yahoo Finance, Investing.com, FXStreet, Trading Economics, Bloomberg, Al Jazeera, CNN, Benzinga, Polymarket.

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