Cisco Systems reported a jump in net income in the July quarter as the company continued to receive billions in orders from artificial intelligence hyperscalers. The network-equipment company on Wednesday reported a profit of $3.86 billion, or 97 cents a share, in the quarter ended July 25. That compares with a profit of $2.55 billion, or 64 cents a share, a year earlier. Stripping out certain one-time items, adjusted earnings were $1.22 a share, compared with the $1.17 analysts were expecting, according to FactSet. Hyperscalers like Amazon, Microsoft MSFT and Alphabet’s GOOGL Google are investing heavily in AI infrastructure, from chips to data center development, networking equipment and software. Meanwhile, top AI labs are racing to build and train ever-more capable models. “It’s the fastest-moving technology transition that we’ve ever seen,” Chief Executive Chuck Robbins said in an interview. Robbins said the AI build-out is moving so fast that “most customers know that if they pause or slow down they run the risk of being way behind.”

The Switzerland market ended notably lower on Wednesday after languishing in negative territory right through the session as investors chose to take some profits amid a lack of fresh triggers. The benchmark SMI ended down by 125.78 points or 0.86% at 14,449.47, off the day's low of 14,413.15. Logitech International closed nearly 3% down. Geberit, SGS, Lonza Group and Straumann Holding ended down 1.5%-2%. Nestle, Novartis, Partners Group, Givaudan, Roche, Swiss Life Holding, Julius Baer and Lindt & Spruengli also closed weak. Kuehne + Nagel climbed 3%. VAT Group gained nearly 2%, while ABB and Sandoz Group finished lower by 1% and 0.8%, respectively.

Europe
The major European markets closed weak on Wednesday, due largely to profit taking after recent gains. U.S.-Iran tensions and continued uncertainty about the reopening of the Strait of Hormuz hurt as well. Investors digested a somewhat soft inflation data that helped raise hopes the Fed will not hike interest rates for now. The pan European Stoxx 600 ended down by 0.16%. The UK's FTSE 100, Germany's DAX and France's CAC 40 closed lower by 0.1%, 0.23% and 0.46%, respectively. Switzerland's SMI settled 0.86% down. Austria, Czech Republic, Denmark, Finland, Iceland, Ireland, Norway, Poland, Portugal and Türkiye closed higher. Netherlands, Russia and Sweden ended weak, while Belgium, Greece and Spain closed flat. In the UK market, Admiral Group, 3i Group, Intercontinental Hotels Group, Endeavour Mining, Fresnillo, Polar Capital Technology Trust, BAE Systems, Coca-Cola Europacifc Partners and United Utilities gained 1.5%- 3%. SSE, Standard Life, Halma, Lloyds Banking Group, Babcock International, Weir Group, Hiscox, Natwest Group and Aviva also ended notably higher. Burberry Group and Marks & Spencer shed 4.2% and 4%, respectively. Reckitt Benckiser, IG Group Holdings, Relx, Tesco, Diageo, Sainsbury (J), The Sage Group, Bunzl and Next lost 1.6%-2.8%. In the German market, E.ON weakened despite the company reporting an increase in net income. In the first half, adjusted net income rose 5% to 1.9 billion euros from 1.8 billion euros last year. Looking ahead for fiscal 2026, E.ON expects adjusted Group net income of 2.7 billion euros to 2.9 billion euros, corresponding to adjusted earnings per share of 1.03 euros to 1.11 euros. Brenntag shed 2.1%. Profit attributable to Brenntag shareholders climbed to €179 million or €1.23 per share in the second quarter, from €42 million or €0.30 per share a year ago. Operating gross profit rose 17.7% to €1.146 billion. SAP, Adidas, Volkswagen, Bayer, Fresenius Medical Care, Porsche Automobil Holding, Daimler Truck Holding, Deutsche Telekom, Henkel, Siemens Healthineers, Symrise, BMW, Mercedes-Benz and Beiersdorf lost 1%-2.6%. In the French market, Schneider Electric, STMicroelectronics, Thales and Legrand moved up 1.4%-1.8%. Credit Agricole, Safran, Airbus, Bouygues and Carrefour gained 0.4%-0.75%. Likewise, EU harmonized inflation accelerated to a three-month high of 2.8% in July, as estimated, from 2.4% in June.

United States
U.S. stocks were mixed as deadlock in the Middle East offset relatively benign consumer-inflation data and an artificial-intelligence earnings bonanza. The Dow Jones Industrial Average fell 21.58 points or 0.04%, to 53770.27. The broad S&P 500 rose 20.30 points, or 0.26%, to 7748.50. The tech-heavy Nasdaq Composite added 143.04, or 0.54%, to 26588.49 The pendulum AI stocks swung to positive sentiment after strong earnings from some key players. CoreWeave shares surged 19% to $107.73 after the cloud computing company, which specializes in providing computing capacity to AI firms, reported a narrower second-quarter loss than anticipated on surging revenue. Similarly, CoreWeave's cloud rival Nebius Group surged 34% to $259.20 after it said quarterly revenue had risen by more than five-fold. Shares of server maker Super Micro Computer rose 19% to $37.61 as the AI boom generated strong fiscal fourth-quarter sales. Among other AI companies, Nvidia rose 3% to $224.09. Restaurateurs were also in focus. Wendy's shares rose 15% to $8.66 after reports that Nelson Peltz's Trian Partners investment firm had offered to take the burger chain private following a period of dwindling sales.

Asia
U.S. stocks were mixed as deadlock in the Middle East offset relatively benign consumer-inflation data and an artificial-intelligence earnings bonanza. The Dow Jones Industrial Average fell 21.58 points or 0.04%, to 53770.27. The broad S&P 500 rose 20.30 points, or 0.26%, to 7748.50. The tech-heavy Nasdaq Composite added 143.04, or 0.54%, to 26588.49 The pendulum AI stocks swung to positive sentiment after strong earnings from some key players. CoreWeave shares surged 19% to $107.73 after the cloud computing company, which specializes in providing computing capacity to AI firms, reported a narrower second-quarter loss than anticipated on surging revenue. Similarly, CoreWeave's cloud rival Nebius Group surged 34% to $259.20 after it said quarterly revenue had risen by more than five-fold. Shares of server maker Super Micro Computer rose 19% to $37.61 as the AI boom generated strong fiscal fourth-quarter sales. Among other AI companies, Nvidia rose 3% to $224.09. Restaurateurs were also in focus. Wendy's shares rose 15% to $8.66 after reports that Nelson Peltz's Trian Partners investment firm had offered to take the burger chain private following a period of dwindling sales.

Bonds
The yield on the 10-year U.S. Treasury note declined 0.001 percentage point to 4.682%. The yield on the policy-sensitive two-year Treasury fell 0.019 percentage point to 4.198%.

Analysis
UBS raises Oerlikon’s target price to CHF 5.80 (5.70) – Buy
Citi lowers Burberry’s target price to GBP 15.10 (15.60) – Buy
Citi raises Michelin’s target price to EUR 39 (37) – Buy


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