IBM Tumbles 22% Toward Its Worst Day Since 1987, Rattling Software Stocks
IBM reported preliminary Q2 2026 revenue of $17.2 billion, up 1%, versus the $17.86 billion consensus. Operating (non-GAAP) EPS came in at $2.93, below the $3.01 consensus, with GAAP EPS at $2.27. Krishna said clients redirected capex in the last weeks of June toward servers, storage, and memory to secure supply-constrained infrastructure ahead of expected price increases, a reprioritization whose magnitude IBM didn't anticipate. The contagion is real but uneven this morning. Microsoft (NASDAQ:MSFT) shares are down 3% to $379.76, and ServiceNow (NYSE:NOW) shares are down 8% to $102.38. The iShares Expanded Tech-Software Sector ETF (NYSEARCA:IGV) is trading down 4% to $89.31. IGV holds IBM alongside these names and isn't leveraged, though its concentration in a handful of mega-cap software issuers means single-name shocks travel quickly through the fund. Polymarket currently prices only a 25.5% probability that IBM beats when the full report lands. Investors can watch for whether Software and Red Hat momentum reasserts itself on the July 22 call, whether Krishna quantifies the slipped-deal pipeline, and whether the mainframe demand slump was truly a June air pocket.
U.S. CPI inflation fell to 3.5% in June 2026 on gasoline drop
The Consumer Price Index fell 0.4% in June on a seasonally adjusted basis, the Bureau of Labor Statistics reported Tuesday, pushing the annual inflation rate to 3.5%, down from 4.2% in May. The energy index was the primary driver of the decline, shedding 5.7% over the month — its steepest one-month retreat since April 2020. Gasoline prices fell 9.7% in June, while fuel oil dropped more than 9%. Despite the monthly pullback, the energy index still stood 15.7% above year-ago levels, and gasoline prices remained 26.7% higher than a year earlier. Inflation excluding food and energy was unchanged on a monthly basis, holding the 12-month core rate at 2.6%, compared with 2.9% in May. Shelter costs rose just 0.1%, the smallest monthly gain for that index since January 2021. Motor vehicle insurance fell 2.0%, communication prices dropped 1.5%, and apparel declined 0.6%. The monthly dip at the pump was partly attributable to a lull in the Iran war, the conflict that has done the most to push energy costs higher over the past four and a half months, according to the Wall Street Journal. But the ceasefire has since collapsed, and the benchmark U.S. oil price rose 12% in July through Monday, according to the Journal, raising the prospect that energy costs could rebound in coming months. Federal Reserve officials are watching the data as they weigh whether to raise interest rates. Fed Governor Christopher Waller said Monday that he would require a sustained string of encouraging data points before concluding that inflation is on a durable path back to the Fed's 2% goal.
New York becomes first U.S. state to impose AI data center ban
New York State Governor Kathy Hochul on Tuesday signed an executive order barring the construction of new large-scale data centers using 50 megawatts or more of power for up to one year, making the Empire State the first state in the nation to impose such a ban. Tuesday's moratorium might not be the last action taken by the governor's office, either. The Responsible Data Center Development Act, passed by the state legislature earlier this year, contains a one-year moratorium on the construction of new data centers with a peak energy demand of 20 megawatts or more. In addition to the pause on new data center construction, Hochul directed the NYS Department of Public Service to "consider approaches to require data centers to fund new clean electric generation dedicated to their operations, including but not limited to customer-sited distributed energy resources and battery storage."
Stripe and Advent International make $53 billion offer for PayPal
Stripe and Advent International have made a joint offer to acquire PayPal Holdings for $60.50 per share, valuing the payments company at more than $53 billion, according to Reuters, citing unnamed sources familiar with the matter. The offer — put forward earlier this month — carries approximately $50 billion in committed bank financing and was priced at a 28% premium over PayPal's Tuesday close. In the first quarter, PayPal brought in $8.35 billion in revenue, while total payment volumes reached about $464 billion — up 8% year over year when stripping out currency effects. The potential deal would add to a wave of consolidation in the global payments industry. A notable recent example was Global Payments' 2025 agreement to buy Worldpay from FIS and GTCR in a transaction valued at $24.25 billion.
Morning Bid: Oil boils
With Iranian missiles hitting ships in the Gulf again amid a third night of U.S. strikes, Hormuz traffic has slowed to a two-month low, according to shipping data. World crude oil prices are now well above $80 per barrel again after leaping more than 9% on Monday and extending those gains early on Tuesday, trading at levels last seen before the interim ceasefire deal was signed in mid-June. The renewed jump in crude prices somewhat reduces the impact of the headline U.S. CPI release today. It's expected to have fallen back from three-year highs above 4% owing to the recent energy price retreat, but the latest fighting makes that moot. Investors' focus will be on core inflation, which is still close to 3%. Fed Governor Chris Waller said on Monday that the Fed is not going to get this back to target simply by staring at it. It will have to act. Fed Chair Kevin Warsh will give his first testimony to Congress later on Tuesday. He's no fan of forward guidance, which may be wise at the moment, so markets are unlikely to get much of a steer. But futures still have a Fed hike priced by year-end and a significant chance of one as soon as this month. Stocks are under pressure from the new energy and interest-rate tensions, with chip stocks still taking a beating as the U.S. quarterly earnings season kicks off this week. The big banks are due to report today. South Korean chipmaker SK Hynix, which listed ADRs on Friday, tumbled sharply again on Monday, giving back all of its Friday gains.
ASML stock pops on strong orders for advanced chipmaking equipment
ASML now expects 2026 net sales of about $49.2 billion to $51.5 billion, well above the roughly $45 billion average analyst estimate compiled by Bloomberg and above the high end of its previous guidance. Orders for the company's EUV lithography machines, which are essential for manufacturing chips used in AI applications and data centers now stretch into 2028. What else you need to know: ASML's results offer another sign that investment in AI infrastructure remains robust, as leading chipmakers continue spending heavily on the advanced lithography equipment needed to manufacture cutting-edge processors and memory chips. Its customers include Taiwan Semiconductor Manufacturing Co. (TSMC), Intel (INTC), SK Hynix (SKHY), and Micron Technology (MU).
Why the KORU 3X South Korea Bull ETF Is Surging as SK Hynix Rips on HBM4 News
The company’s US-listed NASDAQ ADR (SKHY) surged roughly 22% on the session, jumping from $152.35 to about $186.53 after the company confirmed it has begun mass production and shipment of 12-layer HBM4 to NVIDIA for the next-generation Vera Rubin AI platform.
The Goldman Sachs Group Q2 Earnings Call Highlights
Goldman generated record quarterly net revenues of $20.3 billion and record earnings per share of $20.98. The firm reported return on equity of 23.5% and return on tangible equity of 25.5% for the quarter. Coleman said Global Banking & Markets produced record revenues of $15.5 billion, while Asset and Wealth Management revenues rose 20% year over year to $4.6 billion. Solomon said large-cap corporate M&A volumes were up 90% through the first half of 2026, as clients sought greater scale to invest and compete more effectively. Coleman said advisory revenues rose 17% year over year to $1.4 billion, primarily due to higher completed volumes. He said Goldman advised on $1.2 trillion in announced deal volume through the first half of the year, maintaining the firm’s top position in announced and completed M&A volume and leading its closest peer by approximately $425 billion. Equity underwriting revenues were $985 million, up 130% year over year, while debt underwriting revenues reached $1 billion, up 75% and representing Goldman’s best quarter on record in that category, according to Coleman. The firm cited marquee mandates including acting as lead-left bookrunner on what Solomon described as the record-breaking IPO for SpaceX and an equity raise for Alphabet. Solomon also said Goldman advised on Dominion Energy’s sale to NextEra Energy and Comcast’s spinoff of NBCUniversal. Goldman reported record assets under supervision of $4 trillion at quarter-end, supported by $91 billion of long-term net inflows. Coleman said the quarter marked the firm’s 34th consecutive quarter of long-term fee-based net inflows. Management and other fees in Asset and Wealth Management rose 20% year over year to a record $3.4 billion, primarily due to higher average assets under supervision. Wealth management client assets reached roughly $2 trillion, according to Solomon, who said the firm’s ultra-high net worth business is positioned to benefit from wealth creation tied to elevated capital formation and strategic activity. Solomon said Goldman has seen nearly 900 referrals to wealth management from investment banking since the start of 2025, demonstrating the benefits of the firm’s One Goldman Sachs approach. In alternatives, Goldman reported $459 billion of assets under management at the end of the quarter. Coleman said gross third-party alternatives fundraising was a record $59 billion for the quarter and $85 billion for the first half of the year. The firm now expects full-year alternatives fundraising to exceed $125 billion. Solomon said investor interest remained strong, including in private credit, where Goldman raised $31 billion during the quarter. He also highlighted recent mandates to manage Verizon’s and Lockheed Martin’s retirement plans, representing a combined $70 billion in assets under supervision. Goldman's common equity tier 1 ratio was 12.9% at the end of the quarter under the standardized approach, 150 basis points above its current capital requirement. Coleman said the firm was pleased with its recent CCAR results and continues to support proposed regulatory changes aimed at improving transparency and stress test calibration. The firm repurchased $4 billion of common stock during the quarter and announced an increase in its quarterly dividend to $5 per share. Solomon said the dividend increase represented a 25% rise from a year earlier and a 150% increase over the past five years.
Lucid Plunges 50% as Reports Claim EV Maker Is Weighing a Take-Private or Chapter 11
Lucid lost about $2.7 billion in 2025 and has been burning roughly $1 billion a quarter. It ended the year with about $998 million in cash and roughly $4.6 billion in total liquidity. The Public Investment Fund, Lucid’s majority owner, has committed more than $9 billion since 2018, yet Lucid’s market value has slid to roughly $2.3 billion, less than a third of what PIF has poured in. Lucid’s gross margin sits at -93%, meaning the cost of revenue still exceeds the sales, and the automaker’s return on equity is -118%.
Morgan Stanley Drops a $50 Billion Bombshell — Can Big Tech Still Afford to Build the AI Factories of the Future?
Morgan Stanley raised AI cluster cost estimates, with Nvidia's Vera Rubin systems now priced at $49 billion per gigawatt. That figure is nearly 20% higher than prior forecasts. Only companies generating hundreds of billions in annual cash flow, like Microsoft, Amazon, and Meta, can finance next-generation AI campuses at this scale. Those investments have fueled one of the strongest bull markets in technology history, with companies like Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META) leading the charge. AI Infrastructure Is Becoming Even More Capital Intensive Morgan Stanley updated its bottom-up estimates for next-generation AI clusters and found costs have risen across the board. According to the investment bank, Nvidia's GB200 systems now cost about $35 billion per gigawatt (GW) of computing capacity, up 16% from prior estimates. GB300 clusters rise to $39 billion per GW, while Vera Rubin-based systems jump nearly 20% to $49 billion per GW. Those estimates closely match Nvidia's own guidance of $50 billion to $60 billion per GW for Rubin-era AI factories. OpenAI's Stargate initiative, backed by SoftBank and Oracle (NYSE:ORCL), plans to invest $500 billion through 2029 to build up to 10 GW of AI infrastructure.
Meta Ups Investment to $50B for Louisiana Data Center
Meta’s $50B investment marks a sharp escalation in data center spending. The project’s scale stands out in both dollar volume and physical footprint. Its 5 GW capacity exceeds previous developments by a wide margin. The investment also highlights how AI demand reshapes site selection decisions. Developers now place greater weight on power access, land availability, and labor supply. Meta also structured a unique agreement with local utilities. According to the company, Entergy Louisiana customers will save $2.65B in electricity costs over 20 years. The agreement shows how hyperscaler projects can benefit surrounding communities directly. Meta has already signed more than $1.6B in contracts with Louisiana companies since December 2024. Construction began that same month. The project should support 7,500 construction jobs at peak activity and create 1,000 permanent positions after completion. The Hyperion campus reflects a broader hyperscaler arms race. Amazon, Microsoft, Google, and Meta continue expanding data center footprints aggressively. They need more computing power and electricity to support AI models and services. Meta’s Cheyenne, Wyoming, data center remains under investigation. A contractor allegedly discharged contaminated wastewater at the site. The project also highlights growing scrutiny around large AI developments.
JPMorgan beats estimates on strong banking fees
Earnings per share of $7.70 beat the consensus estimate of $5.55. Revenue reached $57.35 billion, surpassing the $50.61 billion estimate and marking a 28% increase from $44.91 billion in the same quarter last year. The reported earnings per share of $7.70 included significant items totaling $1.56 per share, consisting of a $4.6 billion net gain related to Visa shares and $1.0 billion in gains on certain equity investments. Excluding these items, net income was $16.9 billion, up 13% from the prior year. The bank's strong performance was driven by elevated market activity across its businesses, with each line of business achieving record revenue. Markets revenue surged 35% to $12.1 billion, with Equity Markets revenue jumping 86% due to strong client activity and trading performance. Investment Banking fees increased 30% to $3.3 billion, reaching the highest level since 2021. The Corporate & Investment Bank generated revenue of $24.9 billion, up 27% from the prior year. Consumer & Community Banking revenue rose 8% to $20.3 billion, while Asset & Wealth Management revenue increased 19% to $6.9 billion. Assets under management reached $5.1 trillion, up 18% YoY.