US Stock Outlook | Three Major Index Futures Rise Together, Cisco Jumps After Earnings

Pre-Market Market Trends

1. As of May 14 (Thursday), U.S. stock index futures are all up before the market opens. As of the time of writing, Dow futures are up 0.71%, S&P 500 futures are up 0.29%, and Nasdaq futures are up 0.24%.

1. As of the time of writing, the German DAX index is up 1.49%, the UK FTSE 100 index is up 0.46%, the French CAC 40 index is up 0.81%, and the Euro Stoxx 50 index is up 1.00%.

1. As of the time of writing, WTI crude oil is down 0.09%, priced at $100.93 per barrel. Brent crude oil is down 0.10%, priced at $105.52 per barrel.

Market News

Wall Street's famous bear turns bullish! Morgan Stanley analysts expect the S&P 500 index to rise to 8,300 points in the next 12 months. With the surge in artificial intelligence, corporate profit expansion, and the resilience of the U.S. economy, Wall Street is increasingly optimistic about the outlook for U.S. stocks. Morgan Stanley's well-known strategist Wilson, who has long held a cautious stance, has now fully turned bullish. Wilson's latest forecast suggests that the S&P 500 index is expected to reach 8,300 points in the next 12 months, and he anticipates it will be around 8,000 points by the end of this year. If this prediction materializes, the U.S. stock market's performance over the next few years will be one of the strongest since the internet bubble of the 1990s. He stated that corporate profit growth will remain the core driver of stock market increases over the next 12 months, and the accelerated adoption of AI applications, improved operational leverage, and continuous efficiency enhancements by companies will further strengthen profit performance.

The Federal Reserve enters the "Walsh Era": a change in chair but no change in the inflation script, the U.S. bond market braces for the "5% era." The Senate voted narrowly on Wednesday to approve Kevin Walsh's nomination as chair of the Federal Reserve. This marks one of the most controversial leadership changes in the U.S. central bank in decades and will test its political independence. Meanwhile, investors are preparing for U.S. Treasury yields to remain elevated for a longer period. They are questioning whether the incoming Federal Reserve chair Kevin Walsh has the ability to quell inflation driven by soaring oil prices due to long-standing conflicts in the Middle East. As rising energy prices exert pressure, investors are demanding higher compensation for inflation risks, leading to a surge in long-term yields, including the benchmark 10-year U.S. Treasury. The rise in long-term yields will directly translate to higher borrowing costs across the economy: mortgages, corporate bonds, and leveraged loans are all becoming more expensive The Federal Reserve's October survey has already raised the inflation red flag! The tail risk of interest rate hikes returns to the spotlight. According to the Federal Reserve's heavily released annual household and consumer survey report, the vast majority of Americans are worried about high prices in 2025, while an increasing number of people are also beginning to feel anxious about the U.S. non-farm employment market. The implications of this Federal Reserve annual survey conducted in October 2025 for monetary policy expectations undoubtedly reinforce the latest market pricing expectations that "the Federal Reserve is unlikely to cut interest rates in the short term and may even need to retain the tail risk of interest rate hikes." According to the Federal Reserve's 2025 Annual Household Economic and Decision-Making Survey, in the context of nearly zero job growth last year, 42% of adults indicated that finding or keeping a job is a slight or major concern (i.e., a secondary or primary concern), up from 37% in 2024. Additionally, it surprised the market that nine out of ten U.S. respondents (i.e., a staggering 90% ratio) expressed concerns about significant price increases.

June rate cuts have become a luxury! The Federal Reserve's hawkish stance resurfaces, Collins states that rates need to remain in a restrictive range. Boston Federal Reserve President Susan Collins stated that interest rates should remain unchanged for "some time" and expressed particular concern about inflation being at high levels. Collins remarked, "More than five years of inflation overshooting has worn down my patience for 'ignoring' another supply shock." Collins anticipates that if the Middle East conflict can be resolved "quickly," it will lead to robust economic growth this year, with the unemployment rate possibly rising slightly, but there will be almost no progress in reducing inflation. She stated, "I think it may be very important to maintain the current slightly restrictive monetary policy stance for some time." She added that the situation of inflation being above target levels has made it a focus to keep inflation expectations stable around the Federal Reserve's 2% target.

A "perfect storm" of supply and demand is brewing: After silver breaks through $88, is the next stop a return to three digits? Under the multiple influences of strong industrial demand, ongoing supply chain tensions, and geopolitical risks, the spot silver price continues to be strong, once approaching the $90 per ounce mark. The spot silver price surged over 6% mid-week, reaching a new high in nearly two months, and is currently hovering around $86 per ounce, continuing its recent rebound momentum. Analysts believe that the current rise is no longer simply a follow-up to gold's movements; silver's own industrial properties are becoming the key force driving its price trend, and a "perfect storm" pushing prices higher is brewing. For the short-term trend, analysts are focusing on the key resistance level of $90 per ounce. Analysts pointed out that if the silver price can break through $90, traders and investors may begin to target the record high of $120 per ounce set in January this year.

Individual Stock News

Cisco (CSCO.US) secures $5.3 billion in AI orders in Q3, driving performance across the board, announces strategic restructuring All-in AI. The financial report shows that for the third quarter of fiscal year 2026 ending April 25, Cisco achieved revenue of $15.84 billion, a year-on-year increase of 12%, exceeding analysts' average expectation of $15.56 billion; adjusted earnings per share were $1.06, also surpassing the market expectation of $1.04 What stands out even more is the company's performance guidance for the future. Cisco expects its revenue for the fourth fiscal quarter (ending in July) to reach between $16.7 billion and $16.9 billion, significantly higher than the average analyst expectation of $15.8 billion; adjusted earnings per share are projected to be between $1.16 and $1.18, also well above the market expectation of $1.07. At the same time, the company raised its full-year revenue forecast for fiscal year 2026 from the previous $61.2 billion to $61.7 billion to between $62.8 billion and $63 billion. Additionally, the company announced a strategic restructuring plan focused on artificial intelligence (AI), which will involve laying off nearly 4,000 employees to further concentrate resources on AI-related businesses. As of the time of writing, Cisco's stock rose nearly 15% in pre-market trading on Thursday.

Setbacks in electrification lead to massive impairment! Honda (HMC.US) faces its first annual loss in history, but the profit guidance for the new fiscal year unexpectedly exceeds expectations. Honda's financial report released on Thursday showed that for the fiscal year 2025 ending in March 2026, sales increased by 0.5% year-on-year to 21.80 trillion yen, with an operating loss of 414.3 billion yen and a net loss of 353 billion yen. This marks Honda's first annual operating loss since its establishment in 1948. In the fourth fiscal quarter, the operating loss was 1.01 trillion yen, far exceeding the market expectation of a loss of 804 billion yen; the net loss was 889.4 billion yen, better than the market expectation of a loss of 962.2 billion yen. The significant loss in the fourth fiscal quarter was primarily due to the company's write-down of up to 2.5 trillion yen (approximately $15.7 billion) on its electric vehicle business in March. Despite the substantial loss in the fourth fiscal quarter, Honda provided a positive outlook for the next fiscal year. The company expects an operating profit of 500 billion yen for the fiscal year 2026 ending in March 2027, far exceeding the market expectation of 212.4 billion yen. As of the time of writing, Honda's stock rose nearly 3% in pre-market trading on Thursday.

TSMC (TSM.US) predicts semiconductor output value will reach $15 trillion by 2030, with AI and high-performance computing contributing over half. In presentation materials released before a technology seminar held on Thursday, TSMC stated that it expects the global semiconductor market size to exceed $15 trillion by 2030, surpassing the previous forecast of $10 trillion. TSMC indicated that artificial intelligence and high-performance computing are expected to account for 55% of this $15 trillion market, followed by smartphones at 20% and automotive applications at 10%. This steep demand growth curve is rooted in the phenomenal investments made by leading global cloud service providers and data center operators in AI infrastructure. After major tech giants planned to invest heavily in building new types of data centers at the beginning of the year, they quickly realized the severity of the computing power gap and significantly raised their annual capital expenditure budgets during the subsequent first-quarter earnings report period.

A wave of "AI + e-commerce" is sweeping in! Amazon (AMZN.US) will embed Alexa into the shopping search bar, strengthening the moat of its e-commerce kingdom. AI-based algorithm models are entering some of the most valuable entry points of the global retail industry: for example, the shopping search bar on Amazon's e-commerce platform. This largest cloud service provider and online retailer announced on Wednesday that queries entered on Amazon's official shopping website and mobile application will soon generate product comparisons or actual purchase suggestions as responses, based on specific contexts, using cutting-edge AI large language models This new super AI tool called "Alexa for Shopping" will replace Amazon's previously launched Rufus. Amazon hopes that the AI-driven answer mechanism can help prevent shoppers on the Amazon platform from turning to other websites or chatbots.

Important Economic Data and Event Forecast

Beijing time 20:30 Initial jobless claims in the U.S. for the week ending May 9

Beijing time 20:30 U.S. April retail sales month-on-month

Beijing time 22:15 2028 FOMC voting member and Kansas Federal Reserve President Esther George will speak on "Payment Innovations and Community Banks"

Beijing time the next day 01:00 2026 FOMC voting member and Cleveland Federal Reserve President Loretta Mester will give an opening speech at an online discussion on central bank independence

Beijing time the next day 05:30 Federal Reserve Governor Christopher Waller will speak

Beijing time the next day 05:45 FOMC permanent voting member and New York Federal Reserve President John Williams will participate in a discussion

Earnings Forecast

Friday morning: Applied Materials (AMAT.US)

Friday pre-market: Huazhu (HTHT.US)