Key Takeaways
- Global stock markets surged to record highs, with Treasury yields falling, fueled by heightened speculation that the Federal Reserve will initiate a series of rate cuts as early as September, potentially with a 50-basis-point reduction.
- Coherent Corp (COHR) reported stronger-than-expected Q4 FY25 adjusted earnings per share of $1.00 and revenue of $1.53 billion, and announced the strategic sale of its Aerospace & Defence business for $400 million.
- Cisco Systems Inc. (CSCO) posted a narrow beat on its Q4 FY25 adjusted earnings per share of $0.99 and revenue of $14.67 billion, providing an inline forecast for the upcoming fiscal year.
- GE Appliances committed over $3 billion to expand its U.S. manufacturing footprint, a move expected to create 1,000 jobs across five states.
Market Rally Fueled by Aggressive Rate Cut Bets
Global stock markets experienced a significant rally, pushing indices to record highs, as traders increasingly bet on aggressive interest rate cuts by the Federal Reserve. This optimism was further fueled by comments from Treasury Secretary Scott Bessent, who suggested the U.S. could embark on "a series of rate cuts," potentially commencing with a substantial 50-basis-point reduction in September. This outlook contrasts slightly with some analyst views, such as UBS, which anticipates a 25-basis-point cut.
The decline in Treasury yields accompanied the stock market surge, reflecting the market's expectation of looser monetary policy. While some Federal Reserve officials, like Chicago Fed President Austan Goolsbee, indicated that rate cuts would only occur if the labor market weakens and require "several months of good inflation data," the prevailing sentiment among traders remains focused on imminent cuts. Trump's economic adviser, Stephen Miran, also noted that medium-term inflation expectations appear "pretty tame," potentially supporting a more accommodative stance from the Fed. President Trump himself stated he has narrowed the search for a new Federal Reserve chair to "three or four" candidates, with an announcement coming "a little bit early."
Coherent Corp Reports Strong Q4 and Strategic Sale
Coherent Corp (COHR) delivered a robust performance in its fourth quarter of fiscal year 2025, reporting adjusted earnings per share of $1.00, surpassing analyst estimates of $0.92. The company also exceeded revenue expectations, bringing in $1.53 billion against an estimated $1.51 billion.
Looking ahead, Coherent provided a Q1 FY26 guidance for adjusted EPS between $0.93 and $1.13, and revenue between $1.46 billion and $1.60 billion, largely aligning with analyst forecasts. A significant strategic development for Coherent is the planned sale of its Aerospace & Defence business to Advent for $400 million, a move that could streamline the company's focus.
Cisco Systems Posts Narrow Beat, Offers Inline Outlook
Cisco Systems Inc. (CSCO) announced its Q4 FY25 results, reporting adjusted earnings per share of $0.99, slightly above the estimated $0.98. The networking giant also posted revenue of $14.67 billion, narrowly beating the $14.63 billion consensus.
The company's adjusted gross margin stood at 68.4%, exceeding estimates of 68.2%. Product revenue reached $10.89 billion, while service revenue was $3.79 billion. Cisco also reported strong remaining performance obligations (RPO) of $43.53 billion, surpassing the estimated $42.5 billion. Despite the beats, Cisco issued an inline forecast for the full fiscal year 2026, suggesting a stable but not significantly accelerated growth trajectory.
GE Appliances Commits Over $3 Billion to US Manufacturing
In a significant move to bolster domestic production, GE Appliances announced plans to invest over $3 billion in its U.S. manufacturing operations over the next five years. This substantial commitment underscores a broader trend towards reshoring and strengthening American industrial capacity, and is expected to create 1,000 jobs across five states.
This investment, which will expand the company's air conditioning and water heating portfolio and modernize its 11 U.S. manufacturing plants, highlights a strategic focus on localizing supply chains and contributing to economic growth and resilience in the manufacturing sector.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.