Markets
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Luke Kawa

Cisco surges on strong earnings, CEO says customers will spend on AI until “they just absolutely have to stop”

Cisco is the top-performing Nasdaq 100 stock in early trading after the networking products company posted a solid earnings report for its fiscal third quarter, exceeding analysts’ expectations on the top and bottom lines. In addition, its fourth-quarter guidance was above what the Street had penciled in.

Reports of the death of AI demand have been greatly exaggerated, and Cisco is one of the many beneficiaries of the ongoing spending: management said that AI infrastructure orders surpassed their $1 billion target for the year with one quarter to spare.

“AI orders from enterprise customers continue to show momentum as this large, nascent market opportunity starts to unlock,” CEO Chuck Robbins said, adding that tariffs and macro uncertainty hadn’t really sparked any “meaningful change” in customers’ purchasing behavior.

“They’re still committed to the technology transition,” he said. “I think the AI transition is just so important that they’re going to continue to spend until they just absolutely have to stop. And I think that as of right now, they’re still comfortable.”

Call it a tale of two Chucks, because that last remark reminds me of an infamous comment from Citi CEO Chuck Prince in July 2007: “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”

I am certainly not suggesting that a financial crisis lurks around the corner. However, it is meant as a reminder of how deeply corporate decision-making and incentive structures are molded by booms.

When your share price becomes a function of how dedicated the market perceives you to be with a mania in progress (and to a certain degree, how much your operating results can back up your claims about that), the biggest perceived risk, above all else, is not being involved enough.

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Tasha Matsumoto, Luke Kawa
19h
Stocks hammered by tariff turmoil

A Truth Social post from President Trump threatening a “massive increase” on tariffs sent stocks into their steepest drop-off since April.

Bear Roar
J. Edward Moreno
22h
Lilly Endowment unloads about $600 million in Eli Lilly stock during early October

The nonprofit still owns about 10% of the company, a stake now worth about $80.9 billion.

Pharmaceutical Company Eli Lilly Headquarters
Max Knoblauch

Global automakers sink as Trump implies the trade war is heating back up

Shares of several major automakers with large footprints in China sank on Friday following President Trump’s threats to massively increase tariffs on goods from China in response to what he called “hostile” export controls.

Chinese EV titans like BYD, Nio, and XPeng plunged after Trump’s Truth Social post, along with automakers like Tesla and Stellantis that heavily rely on revenue from sales in the country.

EV makers like Rivian and Lucid, which source raw materials and or batteries from China, were also down following the post.

The move comes at a rocky time for US automakers, with the end of the EV tax credit expected to heavily ding sales for the rest of the year.

markets
Matt Phillips

Rare earth stocks spike after Trump says China should not be allowed to hold the world “captive” on rare earths

Shares of rare earth metal producers soared Friday after the president published a Truth Social statement decrying what he describes as Chinese efforts to control the pipeline of the sought-after minerals.

Companies such as MP Materials — which the US government recently took a stake in — USA Rare Earth, and Critical Metals jumped, suggesting investor bets that the the administration could play a bigger role in ensuring US access to rare earths.

Donald J. Trump (@realDonaldTrump)

Companies such as MP Materials — which the US government recently took a stake in — USA Rare Earth, and Critical Metals jumped, suggesting investor bets that the the administration could play a bigger role in ensuring US access to rare earths.

markets
Luke Kawa

US stocks sink after Trump says he’s considering a “massive increase” of tariffs on Chinese imports

More tariffs might be back on the menu.

US stocks reversed lower after US President Donald Trump said in a Truth Social post that he is considering a “massive increase” on tariffs of Chinese imports.

Trump said he’s mulling higher levies as well as “many other countermeasures” because of “the hostile ‘order’ that they have just put out” restricting the export of rare earth metals. He also seemingly canceled his upcoming meeting with Chinese President Xi Jinping in South Korea in two weeks, saying “now there seems to be no reason to do so.”

The SPDR S&P 500 ETF, Invesco QQQ Trust, and iShares Russell 2000 ETF all gave up early gains to fall more than 1%. A basket of stocks compiled by Goldman Sachs of US companies that have significant revenue exposure to China is off more than 2%.

Wafer fab equipment stocks Lam Research, Applied Materials, and KLA Corp, which all count China as their top market, are underperforming, as is iPhone seller Apple.

Chip stocks Advanced Micro Devices, Intel, Broadcom, and Nvidia are all getting hit on the news, as rare earths are needed components for semiconductor production. For Tesla, it’s a similar story given its footprint in China and the importance of rare earths for EVs.

There’s also a lot of plain old dumping of recent winners.

Super Micro Computer, Coinbase, and Robinhood Markets are among the biggest laggards since Trump’s post as investors cut risk.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)

The rare earth curbs are far from the only recent example of China stepping up its defense of domestic industry and resources. Qualcomm is the subject of an antitrust investigation, stringent checks of semiconductor shipments are reportedly in place as officials look to keep Nvidia’s chips from entering the country, and separate reporting indicates that US ships will be charged an escalating fee for docking at Chinese ports.

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