Canada Tariffs Override, CSCO & APP Earnings Movers

Market Overview - Market volatility remains elevated, with current levels around 17.5%, leading to sharp swings in both directions [3] - There was a rotation back into defensive sectors, such as utilities and consumer staples, as the market digests economic data ahead of the upcoming inflation report [4] Cisco Earnings - Cisco's shares are down approximately 6.5% in premarket trading despite beating revenue expectations, reporting $15.35 billion against an expected $15.12 billion, reflecting a year-over-year growth of around 10% [6][7] - Adjusted earnings per share came in at $1.04, slightly above the expected $1.02 [7] - AI infrastructure orders increased to $2.1 billion in Q2 from $1.3 billion in Q1, with expectations of over $5 billion in AI orders for fiscal year 2026 [8] - The company is facing pricing pressures due to increased memory prices and is renegotiating supplier contracts, which has contributed to market concerns about margins [9][10] Applovin Earnings - Applovin reported revenue of $1.66 billion, a 66% year-over-year increase, and adjusted earnings per share of $3.24, surpassing expectations of around $2.90 to $2.93 [12][13] - Despite strong top-line growth, concerns about increasing competition in the AI-powered advertising space may impact future margins [14][15] - Analysts are adjusting price targets but maintaining buy ratings, indicating confidence in the company's long-term prospects despite short-term challenges [17] Tariff Developments - The House passed a measure to end tariffs imposed on Canada related to fentanyl, with a vote of 219 to 211, indicating some bipartisan support [18] - The measure faces significant challenges in the Senate, and analysts believe its implementation is unlikely, but it signals potential shifts in tariff policy [20][21] Market Levels and Trends - The S&P 500 is facing resistance at the 7000 level, with downside support at 6905, indicating a wide range of price movement expectations [22][25] - Elevated volatility is leading traders to price in potential downside moves, reflecting a bearish sentiment in the market [25][26]