Author: Deep Tide TechFlow
US Stocks: A "Perfect Earnings Report" That Dragged the Entire Market into the Mud
Yesterday (February 12) was one of the ugliest days for US stocks this year.
The Dow Jones Industrial Average fell 669 points, a decline of 1.34%, closing at 49,452 points, wiping out the achievement of "breaking above 50,000 points" established just the previous week; the S&P 500 fell 1.57%, closing at 6,832 points; the Nasdaq fell 2.03%, closing at 22,597 points—the worst single-day drop since April. The VIX fear index surged 16% in a single day, and the whiteboard on the wall once again reads "sell everything."
The culprit was Cisco.
The company delivered an earnings report that was "excellent" by any measure: quarterly revenue of $15.3 billion, a year-on-year increase of 10%, a record high; earnings per share of $1.04, higher than Wall Street's expectation of $1.02; product orders grew 18%, with AI infrastructure orders particularly strong, and network equipment revenue surged 21%. Even CEO Chuck Robbins said during the earnings call that the company is in a favorable position as a "trusted infrastructure builder in the AI era."
However, Cisco's stock plummeted 12.3% that day, the largest single-day drop since May 2022.
Why?
Because Cisco mentioned in its earnings report that rising memory chip prices are already eroding gross margins. Non-GAAP gross margin was 67.5%, lower than market expectations; service revenue fell 1% year-on-year; and the full-year FY2026 EPS guidance of $4.13 to $4.17 already factored in the cost impact of tariffs, meaning the shadow of trade friction has not disappeared.
The market read this earnings report as a signal: Even one of the most direct beneficiaries of the AI wave is seeing its profits compressed by memory prices and tariffs, so how wide is the moat of the AI narrative?
Panic quickly spread outward. Apple plummeted 5% in a single day, its worst single-day performance since April this year; Disney fell 5.31%; Meta, Amazon, Nvidia, and Microsoft collectively fell between 1% and 5%. AppLovin, although its quarterly report exceeded expectations, continued to decline as its stock had already fallen 45% year-to-date. The software stock ETF (IGV) plunged 3.7% in a single day, falling back to last week's lows.
The only ones bucking the trend were defensive sectors. Walmart rose 3.8%, and McDonald's rose 2.7%. Sectors that were dragged down by AI panic and consumer data just weeks ago became safe havens yesterday.
Two highlights worth watching in today's pre-market suggest the market may not be completely hopeless: Applied Materials' earnings report exceeded expectations after hours last night, and its stock jumped 12%; Rivian released strong delivery guidance, and its stock rose 16%. Buying interest in chip manufacturing equipment and electric vehicles shows the market is not retreating entirely but is being selective.
Today's Biggest Variable: January CPI, Released Tonight
This is the final blow of the week.
At 21:30 Beijing time tonight (February 13), the US Bureau of Labor Statistics will release the January CPI inflation figures. This data was originally supposed to be released earlier but was delayed due to a partial federal government shutdown.
Market consensus forecast: CPI year-on-year rate is expected to drop slightly from 2.7% in December to 2.5%, with a month-on-month increase of 0.3%. Core CPI year-on-year rate is also expected to drop to 2.5%.
But the risk at this moment is asymmetric—if the data is "lower than expected," the market will breathe a sigh of relief: rate cut expectations will return, tech stocks will catch their breath, and gold and Bitcoin may rebound in the short term; but if the data is "higher than expected,"叠加在强劲非农数据之上 (on top of strong non-farm payroll data), the window for rate cuts will be pushed further away, Treasury yields will surge again, and that would be another nightmare for tech stocks.
CME FedWatch data shows the market currently prices a nearly 95% probability of no rate cut in March and about a 93% probability of a 25 basis point cut in June. A disappointing CPI would reshuffle these expectations.
Gold and Silver: Falling Below 5,000 Again, Awaiting CPI for Answers
Yesterday (February 12), gold fell along with the broader market's risk sentiment—but the decline was much smaller than that of stocks. Spot gold closed around $4,980 to $5,000 per ounce, giving up nearly two days of gains; silver fell over 8%, to around $77 per ounce, approaching the low range again after last week's plunge.
The relative resilience gold showed during this decline is a detail worth noting: on a day when US stocks fell 1.5% to 2%, gold fell only about 2.7%, and buying support quickly emerged below $5,000. This suggests that institutional funds with long-term gold allocations were not scared away by this technical panic.
The real test is tonight's CPI: if inflation data is moderate and Treasury yields fall, gold is expected to return above $5,000; if CPI exceeds expectations, gold will remain under short-term pressure. The underpinning effect of the People's Bank of China's 15 consecutive months of gold purchases, coupled with medium- to long-term geopolitical risks (US-Iran nuclear talks have not yet been finalized), provides structural support below.
Silver's situation is more complex than gold's. London silver inventories continue to shrink, industrial demand (especially for solar panels) is structurally positive, but in the short term, ETF outflows and speculative positions have not fully recovered, so volatility will remain high.
Crypto Market: Bitcoin Slips Towards 65,000, "Extreme Fear" Persists
Currently, Bitcoin is trading around $65,000 to $66,700, continuing the slow downward trend of the past four days. Ethereum is struggling to hold support below $1,990, and XRP is around $1.40.
The plunge in tech stocks is a double blow to the crypto market: first, risk assets are falling in tandem; second, the signal in Cisco's earnings report about "rising AI memory costs" subtly points to a marginal slowdown in AI spending, and it was this AI narrative that crypto bulls originally used to support the logic of "computing demand driving on-chain activity."
Current key market parameters: The Fear & Greed Index remains in single digits (extreme fear); US Bitcoin spot ETFs have seen net outflows of over $1 billion year-to-date; Polymarket betting indicates the probability of Bitcoin falling below $65,000 within the year has risen to 82%. Wolfe Research cites historical patterns, pointing out that Bitcoin's average peak-to-trough decline in its four-year cycle is 75%. If repeated, the theoretical low could be around $31,000 to $35,000, though this is a tail risk. The market's immediate focus is more on whether it can hold $60,000.
Tonight's CPI is the most recent key node. If inflation unexpectedly cools, Bitcoin could see a brief oversold rebound, targeting the $70,000 to $74,000 range; if CPI is higher than expected, the psychological defense line of $60,000 will face its first real test.
In summary, Cisco turned a better-than-expected report card into a hand grenade that blew through the entire market, inadvertently puncturing a belief that the market was carefully maintaining: Can AI's profits sustainably outpace its costs?
Tonight at 21:30, the other half of the answer will appear in the January CPI. The line between a bear market and a recovery lies on either side of this number.
