U.S. stocks rallied sharply Thursday, with the Dow Jones Industrial Average reclaiming the 50,000 level and both the S&P 500 and Nasdaq Composite closing at fresh all-time highs, as investors cheered strong corporate earnings, accelerating artificial-intelligence spending, and signs of improving U.S.-China commercial relations during President Donald Trump’s summit in Beijing with Chinese President Xi Jinping.
The advance was fueled by a blowout earnings report from Cisco Systems, a blockbuster AI-related IPO debut from Cerebras Systems, and optimism surrounding ongoing trade and technology negotiations between Washington and Beijing.
According to the New York Stock Exchange, the Dow Jones Industrial Average closed at 50,063.46, up 370.26 points, or 0.75%. The S&P 500 gained 56.99 points, or 0.77%, to finish at 7,501.24, while the Nasdaq Composite climbed 232.88 points, or 0.88%, to 26,635.22 — both record closes.
The Russell 2000 rose 0.67% to 2,863.09, while the CBOE Volatility Index (VIX) fell 3.4% to 17.26, signaling continued confidence across risk markets.
Oil prices remained elevated as the U.S.-Israeli conflict with Iran continued to pressure global energy markets. West Texas Intermediate crude rose 0.97% to $102 per barrel, while gold slipped 1.06% to roughly $4,657 an ounce. Bitcoin climbed 2.56% to approximately $81,393.
Cisco Ignites AI Rally
The day’s biggest catalyst came from Cisco Systems, whose shares surged roughly 13% after the company delivered stronger-than-expected quarterly results and sharply increased its outlook for AI infrastructure demand.
Cisco reported fiscal third-quarter revenue of $15.84 billion, up 12% year over year and above Wall Street expectations. Adjusted earnings reached $1.06 per share, also topping estimates.
Chief Executive Chuck Robbins raised the company’s full-year AI infrastructure order forecast to $9 billion from $5 billion previously, driven by massive spending from hyperscale cloud customers.
Hyperscale clients alone placed $2.1 billion in AI infrastructure orders during the quarter.
Cisco also issued fourth-quarter revenue guidance well above analyst projections and announced plans to eliminate roughly 4,000 positions as it redirects investment toward AI networking, custom silicon, optics, and cybersecurity.
The results reignited enthusiasm across the broader AI ecosystem.
Cerebras Delivers Blockbuster AI IPO
Another major Wall Street story came from the public debut of Cerebras Systems, the AI hardware and software company whose Nasdaq listing surged roughly 75% after pricing at $185 per share Wednesday evening.
According to SEC filings, the company raised approximately $5.55 billion through the sale of 30 million shares, making it the largest U.S. technology IPO since Uber’s 2019 debut and one of the first major pure-play AI offerings to reach public markets.
The debut further reinforced investor appetite for AI infrastructure and semiconductor-related names.
Trump-Xi Summit Lifts Industrials and Chips
Markets also gained support from developments surrounding the Trump-Xi summit in Beijing.
Boeing shares advanced after Trump stated that China had agreed to purchase 200 Boeing aircraft — the largest Chinese Boeing order since 2017.
The announcement was interpreted as a sign of improving commercial relations between the two countries following years of geopolitical tensions and trade disputes.
Semiconductor and technology stocks also benefited from summit-related optimism.
NVIDIA reached another all-time high after Cantor Fitzgerald analyst C.J. Muse raised his price target to $350 and reiterated an overweight rating on the stock.
Micron Technology, Qualcomm, and other chip-related companies also posted gains.
Meanwhile, appliance maker Whirlpool declined after Goldman Sachs downgraded the company, citing ongoing macroeconomic and industry pressures.
Economic Data Supports Risk Appetite
Thursday’s economic reports reinforced investor confidence that the economy may be slowing enough to support future Federal Reserve easing without signaling recession.
The Commerce Department reported April retail sales increased 0.5%, matching forecasts and marking a third consecutive monthly increase. The closely watched retail-control group measure rose 0.46%, stronger than expectations.
Meanwhile, the Labor Department said initial jobless claims rose to 211,000 for the week ended May 9, slightly above forecasts but still historically low.
Treasury Secretary Scott Bessent also helped calm oil markets after stating China would use its influence with Iran to help maintain open shipping lanes through the Strait of Hormuz.
Applied Materials Extends Chip Momentum
After the closing bell, semiconductor-equipment giant Applied Materials added further momentum to the technology rally.
The company reported record fiscal second-quarter revenue of $7.91 billion, up 11% year over year and above Wall Street estimates. Earnings of $3.51 per share significantly exceeded analyst expectations.
Chief Executive Gary Dickerson told investors the company expects the chip-equipment industry to grow more than 30% in calendar year 2026.
Applied Materials also raised its dividend by 15%, sending shares higher in after-hours trading.
Friday Brings Major Economic and Fed Tests
Attention now turns to Friday’s packed economic calendar and a major transition at the Federal Reserve.
The New York Federal Reserve will release the Empire State Manufacturing Survey before the open, followed by industrial production and capacity utilization figures.
Investors will also closely watch the University of Michigan’s preliminary May consumer sentiment reading, which may provide additional insight into how consumers are responding to elevated food and gasoline prices tied to the Iran conflict.
Friday also marks the final day of Jerome Powell’s tenure as Federal Reserve chair, with newly confirmed Chairman Kevin Warsh preparing to formally take over leadership of the central bank.
Meanwhile, investors remain focused on day two of the Trump-Xi summit, where additional announcements related to tariffs, artificial intelligence cooperation, and trade policy remain possible.
— JBizNews Desk
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