US stocks recovered on Tuesday after June inflation came in better than expected, with the S&P 500 gaining 0.4%, the Nasdaq climbing 0.9% and the Dow adding nine points, though IBM’s worst single-day collapse in more than 50 years kept gains in check and Brent crude hovering near $85 a barrel kept the market on edge.
The Consumer Price Index rose 3.5% year on year in June, below both May’s 4.2% reading and the 3.9% economists had forecast, easing pressure on Federal Reserve Chair Kevin Warsh who testified before Congress for the first time on Tuesday, pledging to make inflation a thing of the past while offering no specific policy signal. Traders cut the probability of a Fed rate hike at the July 29-30 meeting from 42% to under 17% following the data. The 10-year Treasury yield fell to 4.58% from 4.62%.
IBM plunged 25.2%, its worst session since 1972, after CEO Arvind Krishna told investors the company had faltered and failed to close large deals on expected timelines as customers diverted spending toward servers and storage ahead of anticipated AI-driven price increases. The stock was the single biggest drag on both the S&P 500 and the Dow.
Big bank earnings provided the counterweight. Goldman Sachs surged 9%, while Bank of America, JPMorgan Chase, Wells Fargo and Citigroup all beat profit forecasts on strong trading desk performance. Nvidia gained 4.1% and Micron rose 4.9%, recovering part of Monday’s losses. Brent crude settled at $84.73 after briefly topping $87, easing after Trump backed away from his threat to charge a 20% transit fee on all cargo through the Strait of Hormuz.
