US Stocks Rise Up to 0.8% on AI Rally, Led by Cisco Gains

US Stock Futures Indicate Positive Start to Trading on Thursday

The US stock market is set for a positive start to trading on Thursday, May 14, as technology stocks continue to drive the headline indices. This development comes as traders closely monitor the situation involving the world's two largest economies. The tech-heavy Nasdaq 100 Index futures have climbed 0.7%, while those linked to the S&P 500 Index have risen 0.2% after both gauges closed at record highs on Wednesday. The Dow Jones Industrial Average futures have also gained 0.8%.

The tech rally, which had paused earlier, has regained momentum as traders continue to believe that the artificial intelligence-driven trade still has room to run. This sentiment has been strengthened further by Cisco Systems' strong third-quarter earnings, upbeat outlook, and plans to cut 4,000 jobs amid productivity improvements. US equities have surged to record highs, supported by strong corporate earnings and expectations that AI-driven spending will continue to fuel growth.

According to Bloomberg, first-quarter profits at S&P 500 companies have risen 27% so far, more than double the roughly 12% analysts had expected. This marks the fastest year-on-year earnings growth outside recoveries from major economic shocks since 2004. Traders are also closely tracking geopolitical developments involving Iran, along with the summit between Chinese President Xi Jinping and US President Donald Trump. Concerns persist that the conflict in the Middle East could keep inflation elevated and weigh on the global economy.

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Geopolitical Developments and Inflation Concerns

The White House and Chinese state media have reported that the leaders concluded their meeting on Thursday morning after about two hours. US President Trump is expected to depart shortly after midday on Friday following a final private meeting with Xi. Recent US inflation reports have highlighted mounting price pressures, prompting traders to increase bets on a Federal Reserve rate hike over the coming year. The yield on benchmark 10-year US Treasuries has climbed to its highest level since July.

Crude Oil Prices Remain Volatile

Crude oil prices have remained volatile in trade, swinging between gains and losses after posting their first decline in three sessions on Wednesday. Brent crude futures have eased to around $104 a barrel after touching an intraday high of $107, while WTI crude futures have slipped to $100 a barrel from the day's high of $102. The rally was driven by a sharp decline in Saudi production, with Riyadh informing OPEC that output dropped another 651,000 barrels per day in April to 6.316 million barrels per day, down 42% since February and the lowest level since Iraq's invasion of Kuwait in 1990.

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US Stocks in Focus

According to Vested Finance, Nvidia shares have advanced another 1.9% in premarket trading, extending their winning streak to six consecutive sessions as investors continued accumulating AI-focused leaders. Cisco Systems' shares have surged as much as 17% after the company raised its sales forecast and announced deeper cost cuts to focus more aggressively on AI infrastructure. However, some semiconductor stocks have paused after their sharp rally since April, with Intel slipping 3.5% and Micron Technology declining nearly 3% as traders booked profits.

The rally has become increasingly narrow, with a small group of AI-linked companies continuing to push indices higher while several other sectors remain considerably weaker beneath the surface.