SG Morning Brief｜S&P Hits Record, Cisco Drags on Dow

US Overnight

S&P 500 closed +0.65% at a record 7,798.99, Nasdaq +0.81% at 26,803.02, and Dow +0.13% at 53,839.98 — the S&P notched a fresh all-time high as July PPI came in flat month-on-month (consensus +0.2%), easing fears of a September rate hike. Core PPI rose 0.2%, also below the 0.3% consensus. The 10-year Treasury yield data was not available at press time, but the 30-year bond auction drew the highest yield since 2001 as fiscal deficit concerns persist.

Cisco Systems (CSCO) -8.4% — The networking giant reported Q4 FY2026 adjusted EPS of $1.22 (consensus $1.17) and revenue of $17.3B (consensus $16.8B), with AI network orders surging to $9.3B from $5.3B last quarter. However, gross margin slipped to 66.3% from 68.4% a year ago, prompting institutional selling into strength. The decline dragged the Dow, where Cisco had been the top YTD performer, and weighed on networking peers.

Super Micro Computer (SMCI) +4.12% — Shares continued their recovery trajectory, closing at $39.16 after opening at $38.28. The AI server maker has been a beneficiary of sustained data-center buildout, with the market increasingly selective about AI winners that can convert demand into profit growth.

After hours, Applied Materials (AMAT) -5% — The semiconductor equipment leader posted Q3 FY2026 EPS of $3.50 (consensus $3.39) and record revenue of $9.12B (consensus $9.0B), up 25% YoY. Q4 revenue guidance of $10.25B (+51% YoY) impressed, but gross margin guidance of ~50.4% (flat QoQ) disappointed as ramp-up costs from capacity expansion weighed. The stock fell from $534.54 in regular trading to ~$507 in after-hours, dragging semiconductor sector sentiment.

SGX Preview

STI closed virtually flat at 5,720.05, down just 0.7 point (-0.01%) on Thursday in a quiet session. The three local banks were mixed: DBS rose 0.9% to S$76.50, OCBC gained 1.0% to S$31.50, while UOB slipped 0.6% to S$41.70. Singtel reported a 21% rise in Q1 underlying net profit to S$831M, beating the Visible Alpha consensus of S$746.1M, driven by Optus and Airtel contributions; the stock eased 0.5% to S$4.29. Singapore Airlines (SIA) closed at S$7.09, with the carrier reporting its first quarterly loss since 2022 despite record Q1 revenue. The overnight US record high and cooling inflation data should provide a supportive backdrop for a mildly positive SGX open, though the AMAT after-hours slide may temper sentiment in the semiconductor-related names.

Asia Pre-Market

US futures edge higher in overnight trading with S&P 500 futures (SPY overnight) at $778.57, up 0.09% from the regular close, and Nasdaq futures (QQQ overnight) at $733.12, up 0.14%. WTI crude settled at $81.25/bbl, down over 2% on the day amid demand concerns, while Brent closed at $87.07. Gold spot was steady at $4,403/oz, holding near recent highs after the tame inflation data. Bitcoin traded around $63,400, roughly flat. The combination of firm US futures, lower oil prices, and cooling inflation data argues for a measuredly positive open for Singapore, though the AMAT overhang will keep chip-exposed names on watch.

Today's US Earnings & Economic Calendar

Earnings (today):
No major heavyweight earnings scheduled for today. The spotlight is on after-hours reports from the previous session, notably AMAT.

Economic data (today):
Retail Sales MoM (Jul) — 08:30 ET / 20:30 SGT, consensus +0.1% to +0.2%
Core Retail Sales Ex-Autos (Jul) — 08:30 ET, consensus +0.2%
Import Price Index (Jul) — 08:30 ET, consensus +0.1%
Industrial Production (Jul) — 09:15 ET / 21:15 SGT, consensus +0.2%
Capacity Utilization (Jul) — 09:15 ET, consensus 76.3%

Spotlight: Applied Materials (AMAT) — Consensus EPS was $3.39 on revenue of $9.0B for the fiscal Q3 reported after close Thursday. Actual results beat: EPS $3.50, revenue $9.12B. Key watch items: (1) Q4 gross margin guidance of ~50.4%, which was flat QoQ as capacity expansion costs bite, (2) the pace of semiconductor equipment demand growth as the industry shifts to AI-driven chip investment cycles, and (3) management's commentary on 2027 revenue visibility. The 5% after-hours drop suggests the market is focused on margin trajectory rather than top-line beats. Tomorrow's retail sales data will provide the macro context for the next leg in semiconductor stocks.

One More Thing

Markets are navigating a narrow path: cooling inflation supports the case for a Fed pause, but fiscal deficit concerns are pushing up long-end bond yields. The AI trade is increasingly a stock-picker's game — Cisco's margin compression punished the name despite stellar AI order growth, while AMAT's after-hours slide shows that even record revenue may not satisfy if margin quality disappoints. For Singapore investors, today's US retail sales print at 20:30 SGT is the key macro event, with the consumer spending trajectory shaping the outlook for the global growth-sensitive names on the STI.

This briefing is for informational purposes only and does not constitute investment advice.