CPI Cools. IBM Craters.

Rundown · 2026-07-15

June CPI cooled to 3.5% (vs 3.8% est) — biggest monthly drop since 2020 — easing rate-hike fears and lifting Nasdaq +0.9%; big banks beat (GS +9%), chips rebounded (SOX +2.5%); but IBM -25% (worst day since '87) sliced ~425 pts off the Dow.

Market Performance

• S&P 500: 7,543.89 (+0.38%) — cool CPI + bank beats + chip rebound; healthcare lagged
• Nasdaq: 26,107.01 (+0.90%) — led on the chip snapback + rate relief
• Dow: 52,508.66 (+0.02%) — barely green; IBM alone sliced ~425 pts off the index
• Russell 2000: +0.39% — small caps joined the rate-relief bid
• Sector leaders: Tech (chips) · Laggards: Healthcare, Financials (mixed bank tape)
• 10Y yield: ~4.59% — slipped on soft CPI; Fed-hold odds jumped to 83%
• WTI crude: ~$80 — topped $81 intraday; Hormuz blockade; crude +16% off recent low
• SMH +2.5% — MU + SK Hynix (SKHY) rebounded after Monday's rout; AMAT/TER/LRCX up

Cool CPI Reframes the Fed: Hold Odds Jump to 83%

• Headline CPI +3.5% YoY vs 3.8% est — down sharply from May's 4.2% 3-year high
• MoM -0.4% — biggest monthly drop since May 2020; gasoline -9.7% the big driver
• Core CPI +2.6% YoY vs 2.9% est — lowest since February; broad easing
• July Fed-hold odds jumped to 83.4% (from 58.3% Monday) — one hike still priced for 2026
• Warsh testimony: hawkish ("no tolerance for persistently elevated inflation")...
• ...but reassured the Fed "can bring down inflation" — maybe without hiking; yields slipped

Bank Earnings Kick Off Strong + Chips Bounce Back

• GS +9% — EPS $20.98 vs $14.48 est; rev $20.34B; IPO wave (SpaceX, SK Hynix) + trading
• JPM +2.5% — equity-markets revenue +86% YoY; every business line hit record revenue
• BAC +1.9% — equity trading +70% YoY; C -5.3% on expenses, WFC -2.7% on flat NII guide
• SOX +2.5% — memory names rebounded a day after Hynix's -15% Seoul rout
• CRWD +9.4%, TSEM +11% — advancers beat decliners 1.78-to-1 on NYSE

Notable Movers

• (GS) +9% — Crushed Q2 as Iran-conflict volatility + landmark IPOs (SpaceX, SK Hynix) boosted trading + banking
• (LCID) -16% — Report that AlixPartners presented the board options including a take-private deal or Chapter 11
• (IBM) -25% — Q2 pre-announce revealed customers shifting IT spend away from software/infrastructure toward AI hardware

Private Dealmaking

• PixVerse (video generation) — $439M
• Chai Discovery (AI drug discovery) — $400M
• LimX Dynamics (humanoid robotics · China) — $200M
• Contraline (male contraceptives) — $92.5M
• Singularity (drone countermeasures) — $80M
• State Affairs (AI regulatory info) — $70M

TLDR

• Nasdaq +0.9%, S&P +0.38% on cool CPI + bank beats; Dow +0.02% (IBM cut ~425 pts)
• CPI +3.5% (vs 3.8% est), MoM -0.4% biggest drop since 2020; core 2.6%; gas -9.7%
• Fed-hold odds jumped to 83% for July; 10Y to ~4.59%; one hike still priced for 2026
• GS +9% (EPS $20.98 vs $14.48); JPM +2.5% (equities +86%); C -5.3%, WFC -2.7%
• IBM -25% on AI-hardware spend shift (worst day since '87); SOX +2.5% rebound
• LCID -16% on take-private/Ch11 report; WTI ~$80 on Hormuz blockade; PPI Wednesday

The Bottom Line

The cool CPI is the release valve. 3.5% headline with the biggest monthly drop since 2020 knocks the wind out of the rate-hike trade — Fed-hold odds leapt to 83% — even as Warsh talked tough and oil sits at $80. That's why chips bounced and the Nasdaq led despite Monday's rout. But IBM -25% is the tell inside the tape: enterprise IT budgets are being redirected to AI hardware so fast that legacy software/infra is getting starved. The AI-capex trade isn't just lifting winners — it's cannibalizing the losers. PPI Wednesday is the next read.

_For informational purposes only. Not investment advice._