Morning Wrap: ASX 200 to rise; S&P 500 breaks 7,500 for the first time on AI rally and Cerebras IPO

In a nutshell:

• S&P 500 closed above 7,500 for the first time ever (+0.77%), Dow reclaimed 50,000 and Nasdaq hit a record as the AI trade roared back on Cisco's blowout quarter and Cerebras' blockbuster IPO

• Trump-Xi Beijing summit delivered a 200-jet Boeing order, US clearance for Nvidia H200 chip sales to 10 Chinese firms, and an agreement to (try) keep the Strait of Hormuz open

• Resilient retail sales and yesterday's hot US PPI pushed the 10-year yield to a YTD high near 4.48%, with markets now fully pricing out a Fed rate cut this year as Warsh was confirmed as the next Fed chair

Let's dive in.

• Major US benchmarks higher, finished near best levels with the S&P 500 and Nasdaq at all-time highs, while the Dow reclaimed 50,000

• Today marks the 18th new all-time high for the S&P 500 in 2026 (since 1957, it has averaged 18.5 all-time highs a year)

• US 10-year yield hit a YTD high near 4.48% after hot PPI and firm retail sales reinforced bets the Fed will hold for longer, with markets pricing roughly a 28% chance of a rate hike by December 

• A fairly quiet session, with upside largely driven by AI-related optimism, including Cisco (+13.4%) earnings, a big debut for Cerebas, Nvidia chip sales approved for some Chinese firms 

• Nvidia extended a seven-day rally, taking its market cap closer to US$6tn after the US cleared H200 chip sales to 10 Chinese firms (BBG)

• Bitcoin rebounded above US$80,000, up ~3% as risk appetite returned and Cerebras' IPO triggered a broader AI-linked rally (CD)

• Cerebras raised US$5.55bn in the year's biggest IPO so far, with shares closing up 68% at $311 vs. $185 issue price, valuing the AI chipmaker at about US$95bn (CNBC)

• Hedge funds thrive in AI hardware's "golden age," experiencing their best month in decades (WSJ)

• Japan 30Y bond auction mixed with tail widening, yields extend climb as global rout adds pressure (BBG)

• Cisco Q3 FY26 revenue up 12% to record $15.8bn, non-GAAP EPS $1.06 beat consensus by ~6%, FY26 guidance lifted to $62.8-63.0bn, FY26 AI hyperscaler order target raised to $9bn from $5bn, shares up ~13% (CSCO)

• Cisco also confirmed it will cut around 4,000 jobs, or 5% of its workforce, as part of restructuring toward AI, security and silicon-based products (TPl)

• Applied Materials Q2 FY26 record revenue up 11% to $7.91bn, non-GAAP EPS $2.86 up 20% year-on-year, guides semi equipment business to grow more than 30% in calendar 2026 (AMAT)

• Boeing shares fell ~4% after Trump said China agreed to order only 200 jets, well short of the 500-jet deal industry sources had said was being discussed (RT)

• Nvidia gained on news that the US Commerce Department cleared roughly 10 Chinese firms including Alibaba, Tencent, ByteDance and JD to buy its H200 AI chips, capped at 75,000 chips per customer (CNBC)

• TSMC expects global chip market to exceed $1.5tn by 2030, up from prior forecast of $1tn (RT)

• Trump says US-China relations will be better than before, Xi stresses importance of stable relationship (BBG)

• Trump says China agreed to order 200 Boeing jets following his Beijing summit with Xi, marking the country's first US commercial jet purchase in nearly a decade (BBG)

• Xi warns that mishandling Taiwan would cause "clashes and even conflicts" putting the relationship in jeopardy (CNBC)

• Both sides agreed the Strait of Hormuz must remain open and that Iran should not obtain a nuclear weapon, with Xi signalling support for negotiations with Tehran (FN)

• Trump-Xi readout confirmed both sides will work to increase Chinese purchases of US agricultural goods and address fentanyl precursor flows into the US (CNBC)

• Saudi Arabia told OPEC its April crude output fell another 651,000 barrels a day to 6.316m bpd, the lowest since 1990, a 42% collapse since the Iran war began (BBG)

• Iran's Kharg Island oil jetties were empty for a fourth consecutive period, the longest stretch without tankers since the war began, signalling a prolonged export halt (BBG)

• IEA warned global oil market will remain significantly undersupplied until October even if the conflict ends next month, with stockpiles drawing down at a record 4m bpd in March and April (TE)

• OPEC cut its 2026 global oil demand growth forecast to 1.17m bpd from 1.38m bpd, while total OPEC production fell 1.727m bpd in April to 18.98m bpd (YF)

• Fed Schmid said continued inflation is "the most pressing risk to the economy" and that price pressures remain "too high," reinforcing the hawkish camp (RT)

• ECB officials are walking back hawkish signals as a June rate hike becomes less obvious, with oil prices below feared levels and the euro zone economy stagnating (BBG)

• US April retail sales rose 0.5% month-on-month, in line with ests and up 4.9% year-on-year, though gasoline sales jumped 2.8% reflecting fuel-price inflation (UPI)

• UK Q1 GDP grew 0.6% quarter-on-quarter, in line with expectations and the fastest pace in a year, though analysts warned the figure pre-dates the Iran war impact (CNBC)

• US April import prices climbed to multi-year highs, with import fuel prices up around 16.3%, intensifying inflation concerns from the Iran war (Invezz)

• China April exports surged 14.1% year-on-year to a record US$359.4bn, far above 7.9% ests, with imports up 25.3% and the trade surplus widening to $84.8bn (CNBC)

• Resolute Mining retracts ABC Project scoping study, where production targets utilised 100% inferred resources, forecasts do not have a reasonable basis and inconsistent with ASX Listing Rule 5.16.6 (RSG)

• Resources pullback: Commodity prices broadly slipped on Thursday, weighing on resource-related ETFs overnight, with Nickel, Copper and Gold Miners all off 2-3%. Chinese lithium carbonate futures tumbled 5% to 191,760 yuan, likely to add pressure on local lithium (and broader critical metal) names, which already started to slip yesterday (including a 9.8% tumble for Lynas).

• Bapcor downgraded to Sell from Neutral; target cut to $0.40 from $0.76 (Citi)

Stocks trading ex-dividend: 

• Fri 15 May: Dicker Data (DDR) – $0.115, Wam Active (WAA) – $0.032, Wam Microcap (WMI) – $0.053

• Mon 18 May: Alcoa Corporation (AAI) – $0.097, Macquarie Group (MQG) – $4.20, WAM Capital (WAM) – $0.077

• Tue 19 May: GQG Partners (GQG) – $0.034

• Wed 20 May: Gullewa (GUL) – $0.07

• Thu 21 May: Orica (ORI) – $0.285

Other ASX corporate actions today:       

• Dividends paid: Charter Hall Long WALE REIT (CLW), Cromwell Property (CMW), Waterco (WAT)

• IPOs: None

• Earnings: Alkane Resources (ALK)

• AGMs: None

Economic calendar (AEST):

No major economic announcements.