IBM's Worst Day Since 1987 Couldn't Sink the Market — Goldman Sachs and Cooling Inflation Carried It Higher

A Split Verdict: IBM's Historic Drop vs. a Blowout Bank Earnings Season

IBM's Worst Day Since 1987 Nearly Sank the Dow — Goldman Sachs Wouldn't Let It

• IBM tumbled ▼ 24.1% Tuesday — its steepest one-day decline since the 1987 crash — after warning that enterprise customers are redirecting quarterly budgets away from software and services and toward AI hardware, servers, storage, and memory. CEO Arvind Krishna said "numerous large deals" failed to close as a result.
• The slide alone erased an estimated 429 points from the Dow Jones Industrial Average, but Goldman Sachs (GS) surged ▲ 7.4% after smashing Wall Street's Q2 2026 targets — fueled by trading volatility and a wave of major public offerings — adding back roughly 459 points and nearly canceling out IBM's damage. The offsetting swings left the Dow essentially flat, down just 0.19% to 52,465.31 — while the S&P 500 and Nasdaq Composite, less exposed to IBM specifically, climbed 0.39% and 0.90%.
• Goldman's results kicked off a stronger-than-expected Q2 bank-earnings season alongside JPMorgan Chase, which also topped estimates on stronger trading and investment-banking revenue.
• The IBM warning revived a theme first flagged Monday: enterprise customers appear to be front-loading AI infrastructure spending at the expense of traditional software and services budgets — a dynamic investors will be watching closely in the earnings reports still to come this week.

Bank Earnings Season Opens With a Bang — Chips Split on AI Capex Bets

• Financials led the tape as Q2 bank earnings rolled in: Goldman Sachs jumped ▲ 7.4%, Morgan Stanley added ▲ 4.56%, and JPMorgan Chase rose ▲ 2.10% on stronger trading and dealmaking revenue, even as Wells Fargo's results were weighed down by tighter net interest margins.
• Semiconductor stocks split along AI-infrastructure lines: Tower Semiconductor jumped on a newly announced $3 billion Japan expansion, and CleanSpark surged ▲ 15% after securing a $6.6 billion infrastructure lease, while chip-equipment and legacy names including Oracle ▼ 6.47%, Intel ▼ 6.12%, and Lam Research ▼ 5.83% lagged on the same enterprise-spending-shift worry that hit IBM.
• Energy stocks caught a bid as oil jumped on escalating U.S.-Iran tensions — WTI crude rose roughly ▲ 2% toward $80 a barrel and Brent climbed toward $85–87 — after President Trump announced a 20% "protection fee" on cargo transiting the Strait of Hormuz following a third consecutive night of U.S. strikes on Iran. Coterra Energy was a notable exception, falling ▼ 8.62%.
• Software and IT-services names broadly underperformed hardware and AI-infrastructure plays for a second straight session, extending a theme that first surfaced in Monday's trading.

Where the Money Actually Went Tuesday

• Goldman Sachs (GS) led the market ▲ 7.4% on blowout Q2 earnings that beat Wall Street estimates across trading, investment banking, and advisory revenue.
• CleanSpark surged ▲ 15% after securing a $6.6 billion infrastructure lease tied to AI and data-center buildout.
• FactSet Research Systems (FDS) climbed ▲ 6.47%, Gartner (IT) added ▲ 6.06%, and Intuit (INTU) gained ▲ 5.38% as data and software-analytics names outperformed.
• Morgan Stanley (MS) rose ▲ 4.56% and JPMorgan Chase (JPM) added ▲ 2.10%, both riding the same bank-earnings tailwind that lifted Goldman.

Cooling Inflation Eases Rate-Hike Pressure as Iran Tensions Push Oil Higher

• June CPI rose ▲ 3.5% year-over-year, cooler than the 3.8% economists expected. The encouraging inflation read helped fuel Tuesday's rally and temporarily eased bets on a Fed rate hike at the July 28–29 meeting.
• Oil prices jumped as the U.S. carried out a third consecutive night of strikes on Iran. President Trump said the U.S. now "controls the strategic Strait of Hormuz" and announced a 20% fee on cargo passing through it, sending WTI crude up roughly 2% and Brent crude toward $85–87 a barrel.
• IBM's collapse marked its worst single-day performance since the October 1987 crash — a reminder of how concentrated AI-driven spending shifts can whipsaw even blue-chip technology names.
• Gold and silver prices were mixed on the day as investors weighed safe-haven demand from Iran tensions against the risk-on lift from cooling inflation and strong bank earnings.

What to Watch the Rest of This Week

• Bank of America and Morgan Stanley round out large-cap bank earnings Wednesday, July 15, with more regional and mid-size banks reporting later in the week — watch for confirmation of the net-interest-margin and trading-revenue trends set Tuesday.
• The Fed's July 28–29 meeting is now squarely in focus after Tuesday's cooler-than-expected CPI print — any further softening in upcoming data could pressure the case for a near-term rate hike.
• Iran-linked oil risk remains the market's biggest wildcard: continued U.S. strikes and the new Strait of Hormuz cargo fee could keep crude volatile into the back half of the week.
• Enterprise tech spending is now a live storyline following IBM's warning — investors will be watching Wednesday and Thursday earnings from other software and hardware names for confirmation (or denial) of the same AI-driven budget shift.
• With the Dow, S&P 500, and Nasdaq all still trailing last Friday's closing highs, watch whether Tuesday's bounce extends into a genuine week-over-week recovery or whether Iran-driven volatility drags indexes lower again.