{"id":66423,"date":"2026-08-12T16:38:18","date_gmt":"2026-08-12T20:38:18","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/markets-rally-on-tame-cpi-as-cisco-and-cerebras-unveil-ai-driven-results\/66423\/"},"modified":"2026-08-12T16:38:18","modified_gmt":"2026-08-12T20:38:18","slug":"markets-rally-on-tame-cpi-as-cisco-and-cerebras-unveil-ai-driven-results","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/markets-rally-on-tame-cpi-as-cisco-and-cerebras-unveil-ai-driven-results\/66423\/","title":{"rendered":"Markets Rally on Tame CPI as Cisco and Cerebras Unveil AI-Driven Results"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>U.S. markets climbed as July CPI data met expectations at 3.4% annually,<\/strong> driving the <a href=\"https:\/\/stockmarketwatch.com\/indices\/sp500\/today\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a> to <strong>7,748<\/strong> and increasing the probability of a Federal Reserve rate hold in September to <strong>62%<\/strong>.<\/li>\n<li><strong>Cisco Systems (<a href=\"\/stock\/CSCO\">CSCO<\/a>) delivered a robust Q4 beat<\/strong> with <strong>$17.3 billion<\/strong> in revenue and record AI hyperscaler orders totaling <strong>$4 billion<\/strong>, signaling a &quot;networking supercycle.&quot;<\/li>\n<li><strong>Cerebras Systems (<a href=\"\/stock\/CBRS\">CBRS<\/a>) shares fell 14% in after-hours trading<\/strong> despite raising its full-year revenue guidance to <strong>$880M\u2013$890M<\/strong>, as a Q2 revenue miss and a wide GAAP loss overshadowed the outlook.<\/li>\n<li><strong>Geopolitical tensions remain high<\/strong> following reports of an Emirati royal jet making unannounced trips to Tehran and a proposed international mission to verify Hezbollah&#39;s disarmament in Lebanon.<\/li>\n<li><strong>Ukrainian drone units outmaneuvered a U.S. armored brigade<\/strong> during exercises in Germany, highlighting significant gaps in traditional military adaptation to modern, drone-heavy warfare.<\/li>\n<\/ul>\n<h2>Market Reaction to Inflation Data<\/h2>\n<p>The <strong>S&amp;P 500 (<a href=\"\/stock\/SPX\">SPX<\/a>)<\/strong> rose <strong>0.3%<\/strong> to close at <strong>7,748<\/strong> on Wednesday after the July Consumer Price Index (CPI) showed inflation cooling to <strong>3.4%<\/strong> year-over-year. This &quot;tame&quot; reading eased investor fears of further Federal Reserve rate hikes, with the <strong>Nasdaq Composite (<a href=\"\/stock\/IXIC\">IXIC<\/a>)<\/strong> gaining <strong>0.55%<\/strong> as technology stocks led the advance. <em>Market participants are now pricing in a 62% chance that the Fed will maintain current interest rates at its September meeting.<\/em><\/p>\n<p>Commodities reacted sharply to the shifting rate expectations, with <strong><a href=\"https:\/\/stockmarketwatch.com\/metal\/gold\" data-internallinksmanager029f6b8e52c=\"4\" title=\"gold price today\">Gold<\/a> (<a href=\"\/stock\/XAU\">XAU<\/a>)<\/strong> jumping above <strong>$4,400<\/strong> as lower yield bets supported the bullion. However, energy markets remained on edge as <strong>Brent Crude<\/strong> hovered near <strong>$89<\/strong> per barrel, driven by persistent risks in the Strait of Hormuz and ongoing Middle East instability.<\/p>\n<h2>Tech Earnings: Cisco and Cerebras<\/h2>\n<p>Cisco Systems (<a href=\"\/stock\/CSCO\">CSCO<\/a>) reported a strong finish to its fiscal year, posting Q4 adjusted EPS of <strong>$1.22<\/strong> on revenue of <strong>$17.3 billion<\/strong>, both exceeding Wall Street estimates. The company highlighted a massive surge in AI infrastructure demand, booking <strong>$4 billion<\/strong> in AI hyperscaler orders in the quarter alone. <em>Cisco&#39;s management raised its FY2027 guidance, projecting revenue between $72.2 billion and $73.4 billion as the &quot;networking supercycle&quot; gains momentum.<\/em><\/p>\n<p>In contrast, Cerebras Systems (<a href=\"\/stock\/CBRS\">CBRS<\/a>) experienced significant volatility following its Q2 results. While the company&#39;s cloud revenue beat expectations at <strong>$126.0 million<\/strong>, its hardware segment lagged at <strong>$54.1 million<\/strong>, leading to a total revenue miss. Despite the immediate share price drop, the company raised its full-year revenue outlook to <strong>$880M\u2013$890M<\/strong>, citing a nearly fourfold increase in its fast-inference cloud business.<\/p>\n<h2>Geopolitical and Military Developments<\/h2>\n<p>Regional stability in the Middle East is under scrutiny as flight data revealed an Emirati royal jet (A6-RJA) traveled to Tehran for the second consecutive day without official explanation. Simultaneously, diplomatic sources indicate that <strong>Britain, Italy, Switzerland, and Indonesia<\/strong> are under consideration for a foreign mission to verify <strong>Hezbollah&#39;s<\/strong> disarmament in southern Lebanon. <em>The proposed plan may include intrusive inspections of private homes, though the mission&#39;s exact mandate remains a point of contention.<\/em><\/p>\n<p>In a significant development for military strategy, the <em>Wall Street Journal<\/em> reported that Ukrainian drone units &quot;decisively beat&quot; a U.S. armored brigade during a major exercise in Germany. The Ukrainian operators used explosive and FPV drones to simulate the destruction of U.S. vehicles so effectively that units were forced to &quot;respawn&quot; multiple times. This exercise has exposed critical vulnerabilities in American armored tactics when faced with modern, low-cost drone warfare.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways U.S. markets climbed as July CPI data met expectations at 3.4% annually, driving the S&amp;P 500 to 7,748 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