The S&P 500 rose on Tuesday after June inflation data came in weaker than expected, though the index’s gain was kept in check as traders assessed rising oil prices and a slew of corporate earnings releases.
The broad market index was up 0.4%, while the Nasdaq Composite advanced 0.8%. The Dow Jones Industrial Average added 107 points, or 0.2%, supported by Goldman Sachs, which popped 8% after the bank posted an earnings beat.
The consumer price index in June fell 0.4% on the month, bringing the annual inflation rate to 3.5%. Economists polled by Dow Jones had called for a 0.2% decline last month and expected the inflation rate to come in at 3.8%.
With easing inflation, expectations that the Federal Reserve would hike interest rates this year reduced following the release. Odds that the central bank would hike rates at its July meeting dropped to 17% from 42% the day prior, per the CME’s FedWatch Tool. However, traders are still expecting a hike at the meeting in September, seeing a 63% chance that the target rate will be a quarter or half point higher.
Treasury yields were off their lows of the day as investors turned their attention back to oil.
“Tuesday’s weaker-than-expected CPI print suggests the inflation surge driven by the Iran war is fading, but this may just be a temporary relief as tensions have escalated in recent days,” said Skyler Weinand, chief investment officer at Regan Capital. “The weaker inflation data likely keeps the Fed on hold for now and reduces any rate hike odds, but we remind investors that almost every communication that has emanated from Chair Warsh during his short tenure so far has been hawkish.”
“Warsh is looking to get consumer prices under control and the best tool the Fed currently has is raising interest rates,” he added.
Semiconductor stocks offered a boost to equities, as they rebounded after a sell-off in the previous session. The VanEck Semiconductor ETF (SMH) traded nearly 2% higher. Applied Materials and Teradyne gained more than 3%, and Lam Research moved up 4%. Micron Technology increased more than 2%. STMicroelectronics added more than 1%.
However, gains were muted as U.S. crude topped $80 per barrel, while international benchmark Brent crude futures added 3% to above $86 a barrel. This comes after President Donald Trump on Monday said he would reinstate a blockade on Iranian shipping through the key Strait of Hormuz.
Gains were also kept in check by a 24% drop in shares of International Business Machines after the company warned second-quarter profits will be lower than expected due to soft demand in its software and infrastructure businesses.
HSBC downgrades Arm Holdings to hold on foundry bottleneck
HSBC is bullish on chipmaker Arm Holdings in the long term but thinks an upstream foundry bottleneck will stymie upside potential for the stock in the short term.
The bank downgraded Arm to hold on Tuesday while raising its price target to $315 from $255. The stock was trading around $284 just after the market open.
“Given incremental foundry capacity allocation being the primary upside catalyst, which we believe is unlikely, we downgrade to Hold due to limited earnings upside potential,” analyst Frank Lee at HSBC wrote in a Tuesday note to clients.
— Tobias Burns
S&P 500 opens higher
The S&P 500 traded up on Tuesday morning.
The broad market index rose 0.2% shortly after the opening bell. The Nasdaq Composite also gained 0.5%, while the Dow Jones Industrial Average lost 88 points, or 0.2%.
— Sean Conlon
IBM on pace for worst day going back to 1987
Shares of IBM were last down 22.95% in the premarket, on pace for its worst day going back to Oct. 19,1987 when the stock was down 23.7%.
If it ends the day even lower, it will have notched its worst day in history in data going back to 1972. IBM has already traded over 4.37M shares, or almost half of its 30-day avg volume of 10.16M shares.
— Gina Francolla and Sarah Min
CPI rose 3.5% annually in June, less than expected
The consumer price index increased by 3.5% in June from the year-earlier period, below the Dow Jones consensus of 3.8%, as energy prices eased last month.
Read more here.
— Jeff Cox
Citi posts upbeat second-quarter earnings
Citigroup‘s second-quarter earnings and revenue beat Wall Street’s estimates.
For the period, Citi posted earnings of $3.15 per share on revenue of $24.77 billion, while analysts had anticipated $2.74 in earnings per share and $23.74 billion in revenue.
Shares were last down nearly 2% in premarket trading, however.
Check out CNBC’s live blog for all things bank earnings this morning here.
— Sean Conlon
Goldman Sachs shares gain after bank posts better-than-expected quarterly results
Shares of Goldman Sachs were more than 3% higher in premarket trading Tuesday after the bank’s second-quarter earnings and revenue surpassed analyst expectations.
Goldman reported earnings of $20.98 per share, above the $14.48 per share that analysts surveyed by LSEG were expecting. Additionally, the bank’s revenue of $20.34 billion exceeded the $16.13 billion consensus estimate.
Check out CNBC’s live blog for all things bank earnings this morning here.
— Sean Conlon
IBM by itself is poised to lower the Dow Industrials by 425 points
International Business Machines by itself is poised to slice 425 points off the Dow Jones Industrial Average in early trading Tuesday.
In recent trading, IBM was down about $69 after warning of weaker-than-expected revenue and profit margins. At the current level of the DJIA divisor, every $1 move in any stock in the 130-year-old benchmark moves the average up or down 6.16 points.
— Scott Schnipper
JPMorgan Chase, Bank of America and Wells Fargo among the stocks making premarket moves
Check out the companies making headlines before the bell:
- JPMorgan Chase — Shares were down slightly in the premarket after the banking giant posted Q2 results. The bank earned $6.14 per share, excluding significant items, on revenue of $58.02 billion. Analysts polled by LSEG expected a profit of $5.85 per share on revenue of $50.19 billion. To be sure, it wasn’t clear if the bank’s profit was comparable to the consensus.
- Bank of America — Bank of America beat expectations in its latest quarter. The bank posted earnings of $1.21 per share, more than the $1.13 expected by analysts polled by LSEG. Revenue of $31.7 billion also exceeded the $30.72 billion consensus estimate. To be sure, shares were flat in the premarket.
- Wells Fargo — The stock were down 1% even after Wells Fargo posted earnings of $2 per share on revenue of $22.62 billion. Analysts surveyed by LSEG were anticipating earnings of $1.72 per share on revenue of $21.84 billion.
Read the full list here.
— Sarah Min
IBM drops after CEO warns about disappointing second-quarter results
IBM CEO Arvind Krishna warned investors Tuesday that its second-quarter financial results will disappoint. Shares fell 18% in premarket trading.
The company expected to conclude the launch of the next generation of its mainframe, z17, in the second quarter, he said.
“Given this was the strongest start to a mainframe program in our history, we expected Infrastructure revenue to decline low-single digits for the year, beginning this quarter,” he wrote in a letter to investors. “What played out was worse than our expectations, driven by a shortfall in our Z performance and the associated software stack, primarily in Transaction Processing.”
Krishna blamed the shifting of capital expenditure plans from clients.
IBM anticipates revenue of $17.2 billion, up 1%, software revenue up 5% and infrastructure revenue down 7%. For the quarter. Diluted GAAP earnings should come in at $2.27 per share, down 2%, he said.
— Michelle Fox
Fed chair Warsh faces Congress scrutiny on inflation, Fed balance sheet, says French Hill
House Financial Services Committee Chairman Rep. French Hill (R-Ark.) said lawmakers are likely to press Federal Reserve Chair Kevin Warsh on price stability, past policy missteps and the Fed’s expanded balance sheet.
Warsh will provide debut testimony to the committee on the outlook for the U.S. economy later Wednesday.
Speaking with CNBC’s “Squawk Box” ahead of Warsh’s appearance, Hill said price stability remains a major concern for the Fed, with inflation “significantly elevated” at over 2%.
Hill said members are also concerned about how Warsh will use the Fed balance sheet, given that the Fed balance sheet has “expanded dramatically” since the financial crisis.
“It’s never really declined… it’s a real behemoth in the economy,” Hill said, adding that there are “big questions” around Warsh’s approach to shrinking the balance sheet.
— Hugh Leask
Bank of America reports Q2 earnings beat
Bank of America posted second-quarter results that beat analyst expectations. The company earned $1.21 per share, topping an LSEG consensus forecast of $1.13 per share. Revenue of $31.7 billion also exceeded an estimate of $30.72 billion.
Shares ticked 0.6% higher in the premarket.
Check out CNBC’s live blog for all things bank earnings this morning here.
— Fred Imbert
JPMorgan Chase slip after posting earnings
JPMorgan Chase shares were down slightly in the premarket after the banking giant posted Q2 results. The bank earned $6.14 per share, excluding significant items, on revenue of $58.02 billion. Analysts polled by LSEG expected a profit of $5.85 per share on revenue of $50.19 billion. To be sure, it wasn’t clear if the bank’s profit was comparable to the consensus.
Check out CNBC’s live blog for all things bank earnings this morning here.
— Fred Imbert
Clarification: This post has been updated to reflect that it wasn’t immediately clear if the EPS could be compared to estimates.
Wells Fargo shares rise on earnings beat
Wells Fargo traded more than 1% higher after the bank posted second-quarter results that beat the Street. The company earned $2 per share on revenue of $22.62 billion. Analysts polled by LSEG expected a profit of $1.72 per share on revenue of $21.84 billion.
Check out CNBC’s live blog for all things bank earnings this morning here.
— Fred Imbert
Treasury yields up amid rising expectations of Fed rate hikes
U.S. Treasury yields edged higher as traders’ expectations for Federal Reserve interest rate hikes grow amid an increasingly fractured Middle East ceasefire.
The key 10-year Treasury yield — the main benchmark for U.S. government borrowing — was more than 1 basis point higher in early trade, at 4.6278%.
Yields on the 2-year Treasury note, which are more sensitive to short-term Federal Reserve rate policy, rose by more than 2 basis points, at 4.2837%. The 30-year bond yield, meanwhile, rose 1 basis point to reach 5.1104%.
The rise comes ahead of Fed chair Kevin Warsh’s debut testimony before Congress, and inflation data for June, due later in the session.
— Hugh Leask
Trump’s Hormuz toll plan will further squeeze traffic, industry warns
President Donald Trump’s proposed imposition of a 20% levy on all traffic transiting the Strait of Hormuz would further disincentivize transit through the crucial waterway, the world’s largest shipping association has warned.
The Baltic and International Maritime Council told CNBC that Trump’s plan to fund security via a levy is “innovative and well-intentioned.” Still, higher costs would “constitute a further disincentive to transiting the Strait which can only be outweighed by a significant reduction in the threat from Iran.”
Separately, shipping giant Hapag-Lloyd said in a statement that a charge for passage through international waters “would be fundamentally wrong.”
It added: “Tolls for infrastructure such as the Suez Canal or Panama Canal are different, because they reflect major infrastructure investments. That is not the case in the Strait of Hormuz.”
— Mike Sheen
Mainland China and Hong Kong stocks rise following exports data
Mainland China stocks closed 2.15% higher at 4,796.50, after country’s reported its exports in June jumped at the fastest pace since 2021, driven by AI boom and a tariff rush that lifted trade.
Hong Kong’s Hang Seng index was 0.6% higher in its last hour of trade on Tuesday, lifted by gains in basic materials and energy sectors.
State-owned conglomerate Aluminum Corporation of China was the top gainer, up over 9% after forecasting a 58% to 73% year-on-year rise in its first-half net profit.
— Justina Lee
Japan’s Nikkei and South Korea’s Kospi reverse declines to close higher
Japan’s Nikkei 225 reversed losses to close 0.7% higher at 67,743.50, supported by gains in energy stocks amid elevated oil prices.
Japan’s largest oil and gas exploration and production firm Inpex advanced 3.9%, petroleum company Idemitsu Kosan added nearly 2% and Cosmo Energy ended 1.5% higher.
South Korea’s Kospi rose 0.7% to 6,856.83, reversing early losses. Index heavyweight SK Hynix also changed course to end 3.7% higher, after dropping more than 8% earlier in the day.
Australia’s benchmark S&P/ASX 200 ended flat at 8,808.50.
— Justina Lee
European stocks open lower; Energy jumps as travel sinks
European stocks slid on Tuesday morning as higher oil prices again fueled investor fears of sticky inflation.
Shortly after the opening bell, the pan-European Stoxx 600 index was seen down 0.45%, with most regional bourses and sectors, oil and gas exempted, trading in the red.
London’s FTSE 100 was seen down 0.15%, while France’s CAC 40 shed 0.6% and Germany’s DAX fell 0.45%.
Travel and leisure stocks led losses, falling 2.1% in early trade, while oil stocks were given a boost by BP announcing slightly higher oil trading in the second quarter.
BP shares opened up 2.7% after the British group said it expects to report an oil trading result for the second quarter slightly better than an exceptionally strong performance in the first.
— Joseph Wilkins
Global bond yields rise as investors up rate hike bets
Global government bond yields rose on Tuesday morning as a further escalation of hostilities between the U.S. and Iran overnight reignited inflation fears and prompted investors to recalibrate interest rate expectations.
Government 10-year bond yields in Europe are up by around 4-5 basis points in early trading, with the exception of the U.K. where yields are flat. However, U.K. rate futures are now pointing to around 50 basis points of Bank of England rate hikes by December compared to about 40 basis points on Monday.
In Asia Pacific, 10-year yields in major markets have added 5-8 basis points, with the exception of Japan, where yields have slumped 7 basis points.
Futures markets are now pointing to a 25 basis point Federal Reserve interest rate hike as soon as October, with a second due in April next year. Just last week, traders were pricing just one hike by December.
— Mike Sheen
Telecoms giant Ericsson plots layoffs and restructuring amid inflationary pressures
Swedish telecoms firm Ericsson warned of layoffs due later in the year on Tuesday after posting a set of underwhelming second-quarter results, weighed down by subdued demand and stronger inflationary pressures.
Ericsson CEO Börje Ekholm told CNBC’s Ritika Gupta this morning that the firm expects its restructuring costs to be “at an elevated level” for 2026 after “very significant costs” during the first quarter.
The firm’s woes primarily stem from a “flattish” global market for 5G infrastructure and rising semiconductor costs driven by a shortage of chip components, according to Ekholm, who is due to step down in September.
— Joseph Wilkins
China exports in June jump at fastest pace since 2021 as AI boom, tariff rush lift trade
China exports in June rose 27% from a year earlier in U.S. dollar terms, the strongest since October 2021, customs data showed Tuesday, quickening from the 19.4% gain in May and sharply beat economists’ estimates for a 18.2% growth.
Imports grew 36% in June, the largest jump since June 2021, gaining pace from the 27.4% growth in May and beating economists’ forecast for a 24% growth. The trade surplus stood at $125.6 billion in June.
Investors are now looking to an expected Politburo meeting in late July for clues on stimulus that could shape policy for the rest of the year, although analysts expect no meaningful stimulus unless growth slows more sharply, given resilient exports and Beijing’s focus on curbing excess factory capacity to fight deflation.
China is expected to release its gross domestic product growth for the second quarter on Wednesday.
— Anniek Bao
Gold gains, Treasury yield up amid concerns over renewed U.S.-Iran hostilities
Traditional safe-haven assets traded mixed Tuesday, as investors continue to keep an eye on the latest developments in the Middle East after tensions between the U.S. and Iran flared up.
The 10-year U.S. Treasury yield rose about 2 basis point to 4.626%, while spot gold rose 0.4% to $4,015.82 an ounce. Silver was flat at $57.68 per ounce.
— Justina Lee
SK Hynix South Korean shares extend declines to fall 8%
Shares of SK Hynix extended losses on Tuesday, falling over 8% in Seoul after posting a record decline in the previous session, as investors continued to unwind positions following the chipmaker’s Nasdaq debut.
Jung In Yun, founder and chief executive officer at Fibonacci Asset Management, told CNBC in an email that the sharp decline reflected a combination of profit-taking, ADR-related arbitrage and broader risk aversion toward South Korean equities, rather than a fundamental shift in SK Hynix’s outlook.
“The ADR itself was not the main cause, but it accelerated short-term positioning. Investors who had benefited from the strong run-up used the successful ADR debut as an opportunity to lock in gains,” he said.
— Lee Ying Shan
Oil gains as Mideast tensions and Hormuz toll prospects raise supply worries
Oil prices rose on Tuesday after U.S. President Donald Trump announced plans to impose shipping fees in the Strait of Hormuz and reinstate a blockade of Iranian ports, raising concerns over potential disruptions to global crude supplies.
U.S. West Texas Intermediate futures for August delivery rose 1.14% to $79.1. International benchmark Brent crude futures for September delivery climbed 0.79% to $83.97, extending gains after advancing 9.6% in the previous session.
Trump said Monday that the U.S. will levy fees on ships transiting the Strait of Hormuz, charging “at the rate of 20% on all cargo shipped,” after describing the United States as the “guardian” of the vital oil transit route.
— Lee Ying Shan
Singapore’s economy expands 5.7% in the second quarter, beating expectations
Singapore’s economy expanded 5.7% in the second quarter, topping market expectations, on the back of strong growth in the manufacturing sector.
Growth was higher than the 5.5% expected by economists polled by Reuters, but lower than the 6.3% seen in the first quarter, according to a release from the country’s Ministry of Trade and Industry.
The goods sector expanded 10.4% from the 8.4% in the previous quarter, while growth in the services sector slowed to 4.6% from 6.2% in the first quarter.
The advance GDP data comes as Singapore’s central bank prepares to announce its quarterly monetary policy decision later this month.
— Lim Hui Jie
Asia-Pacific markets fall as Trump’s Hormuz shipping fees, Iran blockade rattle investors
Asia-Pacific markets opened lower Tuesday after U.S. President Donald Trump proposed to charge a fee from ships passing through the Strait of Hormuz and reinstated a blockade of Iranian ports.
Japan’s benchmark Nikkei 225 fell 1.17%, while the Topix declined 0.51%. South Korea’s Kospi was down 2.01%, while the small-cap Kosdaq lost 1.8%.
Australia’s benchmark S&P/ASX 200 traded 0.29% lower at the open.
— Lee Ying Shan
Asia markets set to open lower as Trump escalates Iran conflict; proposes Hormuz shipping fees
Asia-Pacific markets were set to open lower Tuesday after U.S. President Donald Trump proposed to impose shipping fees in the Strait of Hormuz and restarted a blockade of Iranian ports, escalating the conflict with Tehran.
Japan’s benchmark Nikkei 225 is set to open lower, with the futures contract in Chicago at 67,055 against the index’s last close of 67,242.73.
Futures for Australia’s benchmark S&P/ASX 200 last traded at 8,775 compared to its close of 8,808.5.
What to expect from the June CPI report
Economists polled by Dow Jones expect consumer goods prices fell by 0.2% in June, putting headline inflation at a 3.8% rate. The decline is due to a pullback in energy prices during the month, as crude plunged 25% in June.
When it comes to core prices, which strip out food and energy, CPI is expected to have risen by 0.2% with an annual rate of 2.8% — well above the Fed’s 2% target.
Read more here.
— Jeff Cox
U.S. launches strikes against Iran for third consecutive night, CENTCOM says
U.S. Central Command said Monday evening that the U.S. launched attacks against Iran for the third straight night, as tensions between the two countries continue to escalate.
“These strikes will continue imposing a heavy cost on Iranian forces and degrade their ability to attack innocent civilians and commercial shipping in the Strait of Hormuz,” CENTCOM said in a post on X.
— Fred Imbert
Brent sees biggest daily jump since 2020
Brent crude recorded its biggest one-day gain in more than six years on Monday.
The international benchmark’s September contract rose 9.6%. The last time it saw a bigger daily advance was in May 2020, when it climbed nearly 14%.
Brent ended Monday at $83.80 per barrel, its highest settle in about a month.
— Alex Harring and Chris Hayes
