IBM’s slump is emerging as the biggest single drag on the Dow Jones Industrial Average, with early trading pointing to a 425-point hit from the stock alone. The move comes after the company warned that weaker-than-expected revenue and profit margins were hitting sentiment hard.
The pressure is spreading beyond one stock. JPMorgan Chase, Bank of America and Wells Fargo were all among the most closely watched premarket movers as banks reported mixed second-quarter results, while Treasury yields climbed as traders increased bets on Federal Reserve rate hikes.
IBM’s warning rattles the Dow
In recent trading, IBM was down about $69, and the current level of the DJIA divisor means every $1 move in a stock can shift the index by 6.16 points. That makes the IBM move especially important for a benchmark that already reacts sharply to changes in its biggest components.
Arvind Krishna said IBM expects its second-quarter financial results to disappoint, and the stock fell 18% in premarket trading. He also said the company had expected to finish launching its next-generation z17 mainframe in the second quarter, but weaker performance in Z and the related software stack weighed on results.
| Company | What CNBC reported | Market move |
|---|---|---|
| IBM | Warned of disappointing second-quarter results; revenue expected at $17.2 billion | Down about $69, 18% premarket |
| JPMorgan Chase | Posted Q2 earnings of $6.14 per share on revenue of $58.02 billion | Down slightly premarket |
| Bank of America | Posted Q2 earnings of $1.21 per share on revenue of $31.7 billion | Flat to 0.6% higher premarket |
| Wells Fargo | Posted Q2 earnings of $2 per share on revenue of $22.62 billion | Up more than 1% |
Bank earnings bring mixed reactions
JPMorgan Chase shares were down slightly after the bank reported earnings of $6.14 per share, excluding significant items, on revenue of $58.02 billion. Analysts polled by LSEG had expected $5.85 per share on revenue of $50.19 billion, though it was not immediately clear whether the profit figure was fully comparable with the consensus.
Bank of America beat LSEG estimates with earnings of $1.21 per share versus the expected $1.13, while revenue of $31.7 billion topped the $30.72 billion forecast. Shares were flat in the premarket before ticking about 0.6% higher.
Wells Fargo also beat expectations, posting earnings of $2 per share on revenue of $22.62 billion. Analysts surveyed by LSEG were looking for $1.72 per share on revenue of $21.84 billion, and the stock traded more than 1% higher.
Rates and policy add another layer of tension
U.S. Treasury yields moved higher as expectations for Federal Reserve rate hikes rose alongside an increasingly fractured Middle East ceasefire. The 10-year Treasury yield rose to 4.6278%, while the 2-year note climbed to 4.2837% and the 30-year bond yield increased to 5.1104%.
The move came ahead of Fed chair Kevin Warsh’s debut testimony before Congress and June inflation data later in the session. House Financial Services Committee Chairman Rep. French Hill said lawmakers are likely to question Warsh on price stability, the Fed’s balance sheet and earlier policy missteps.
Asian markets also moved on trade and energy
In Asia, mainland China stocks closed 2.15% higher after exports in June jumped at the fastest pace since 2021, helped by an AI boom and a tariff rush that lifted trade. Hong Kong’s Hang Seng index was also higher late in trading, supported by basic materials and energy stocks.
Japan’s Nikkei 225 and South Korea’s Kospi both reversed earlier declines to end the session higher. Energy names helped lead the advance in Japan as oil prices stayed elevated, with Inpex, Idemitsu Kosan and Cosmo Energy all posting gains.