New York, May 14, 2026, 16:02 EDT
- Dow Jones closed above the 50,000 mark once more. S&P 500 and Nasdaq weren’t far behind, both notching new records as the AI trade bounced back.
- Cisco jumped after the company lifted its outlook for AI infrastructure and announced plans to eliminate close to 4,000 positions.
- Inflation is still front and center, along with oil prices and those stubbornly high bond yields, keeping the rally in check.
U.S. stocks climbed in after-hours trade Thursday. The Dow Jones Industrial Average reclaimed the 50,000 mark, while both the S&P 500 and Nasdaq notched new records. A pop in Cisco fueled renewed appetite for artificial intelligence names. Reuters pointed to tech shares as the main driver, with Cisco, Nvidia, and Cerebras drawing focus for their ties to AI spending.
Why it matters now: Stocks climbed despite oil-fueled inflation dimming rate-cut prospects. Investors are pinning expectations on earnings and AI capex, while the Federal Reserve has shown little sign of shifting toward looser policy for equities.
“Everybody’s asking the same question: how much longer does this rally go on?” said Robert Pavlik, senior portfolio manager at Dakota Wealth, speaking to Reuters. The fear of being left behind is still hanging over investors, he noted. Reuters
Cisco shares surged following news it has pulled in $5.3 billion worth of AI infrastructure orders from hyperscalers during this fiscal year, prompting the networking giant to boost its full-year order outlook to $9 billion—up from the previous $5 billion estimate. The company also announced plans to eliminate fewer than 4,000 positions as it reallocates resources toward AI, silicon, optics, and security.
“Hyperscaler capex spilling downstream,” is how Ryan Lee, senior vice president of product and strategy at Direxion, sized up Cisco’s latest move, pointing to AI spending spreading beyond just chips. That shift has investors viewing Cisco less as a legacy hardware company, more as a data-center infrastructure bet. Reuters
Peer action was in focus. Nvidia climbed after Reuters said the U.S. signed off on H200 chip sales to around 10 Chinese companies. Shares of Cerebras Systems surged, debuting 89% above its $185 IPO price—marking the biggest IPO this year. “The amount we use them will explode,” Cerebras CEO Andrew Feldman told Reuters, pointing to smarter AI models. Reuters
It wasn’t a clean story across the board. “Quite high even out to 2028,” said Nicholas Smith, senior research analyst at Renaissance Capital, describing Cerebras’ valuation post-debut. The appetite for AI exposure hasn’t faded, but defending these price tags keeps getting tougher. Reuters
Economic data didn’t shake things up. Retail sales climbed 0.5% in April, matching forecasts, and core sales saw the same 0.5% increase, according to Reuters. Still, those upticks were driven in part by higher prices. The figures highlight a divided landscape—spending continues among wealthier households, while those with lower incomes are feeling the pinch.
The Labor Department reported a 12,000 uptick in jobless claims, reaching 211,000—numbers that remain historically subdued. That’s enough to keep soft-landing hopes afloat, though the Fed doesn’t get much urgency for rate cuts out of this.
Prediction markets told a similar rates story. Kalshi contracts tracked by Defirate implied a 97% chance the Fed stands pat on rates this June, with odds of no cut before 2027 sitting at 64%. Over on Polymarket, traders quoted by Investopedia ahead of Cerebras’ debut assigned a 30% probability to the company finishing the session valued between $70 billion and $80 billion, while just 9% saw it topping $100 billion.
Kansas City Fed President Jeffrey Schmid labeled inflation the “most pressing risk” to the economy, highlighting ongoing concerns. Investors, according to Reuters, expect long-term Treasury yields to remain elevated as oil prices stick stubbornly high, stoking inflation. The consequence? Higher long yields mean pricier borrowing for mortgages, corporate debt, and leveraged loans. Reuters
Oil prices remained a focus as President Donald Trump sat down with Chinese President Xi Jinping in Beijing. Investors eyed any sign that China could play a role in defusing tensions near the Strait of Hormuz. Brent crude finished the session at $105.72 a barrel, per the Associated Press, holding well above pre-Iran war marks.
Wall Street is sticking with earnings, at least for now. The bigger question: does AI appetite spread past the chip giants? Inflation’s role matters, too—if it stays tame, bonds might not get in the way of this rally.
