US stock market recap for today: CPI cools sharply beyond expectations, IBM “blows up” by 25%, and the market’s technical picture still points to a breakout

First, the biggest macro tailwind: CPI data cools significantly
June’s inflation data gave the market a dose of reassurance. The year-over-year increase landed at 3.5%, well below the market’s prior estimate of 3.8%. The month-over-month figure dropped by 0.4% outright—the largest single-month decline since May 2020. Core CPI came in at 2.6% year over year, with the month-over-month essentially flat, up just 0.02%.
Breaking down the cooling sources, the main driver is the services components: shelter-related rent rose only 0.04% month over month, basically going sideways. Medical service prices are also trending down. Transportation-related spending such as auto insurance and mobile phone bills has similarly eased. As for tariffs, the impact on core goods that they’re more likely to affect (e.g., clothing, entertainment supplies) is largely offset—no clear drag emerged.
Once the data hit, bets on the Fed holding steady in July immediately jumped to around 90%. Correspondingly, the odds of a rate hike were pushed down to around 16.6%. The Nasdaq, gold, and growth stocks all surged on the news that day, and US Treasury yields also fell noticeably.
However, the new chair, Waller, sounded a more hawkish tone during testimony to Congress. He stated clearly that the Fed has zero tolerance for inflation and even drew a line between himself and the White House to emphasize the Fed’s independence. He also reminded the market not to assume too much from hoped-for rate cuts tied to AI. Because this round of AI capex—its long-term capital spending—could end up making inflation “stickier.” So the signal from this hearing is broadly bearish in the near term and unclear over the longer term. The market still sees a rate hike possibility by year-end—most likely September, October, or December. My personal view is still to stay on hold—hawks outside, doves inside.

A constructive turn on the geopolitics front
Trump previously planned to forcibly charge 20% transit tolls on oil tankers passing through the Strait of Hormuz (a single-trip cost increase of about $32 million), but he fully reversed himself. The reason: the UN’s maritime body, multiple Middle Eastern countries, and Gulf oil producers such as Saudi Arabia and the UAE strongly protested and suggested adding increased trade and investment with the US as an alternative. Trump canceled the fee accordingly. That substantially reduced the risk of a broader geopolitical escalation getting out of control, and the broader market rose on the news. Still, it’s worth noting that the tension between the US and Iran has not truly been resolved. Trump has already formally notified Congress that the US and Iran are in a state of war, and obtained authorization that allows US forces to be used in relevant regions without needing a second Congressional approval within 60 days. The US military then launched a new round of airstrikes and resumed a maritime blockade, while Iran attacked US assets in Kuwait and Bahrain.

IBM “blows up” by 25%, revealing an important logic behind capital rotation
IBM’s pre-announced Q2 earnings warning missed expectations badly. Revenue came in at $17.2 billion, falling short of the original $17.9 billion target, and the stock price logged the worst one-day drop since 1968.
The explanation from the CEO was that corporate customers—trying to secure servers, GPUs, and storage equipment amid current supply tightness and rising prices—shifted budgets that were originally intended for traditional software procurement and IT consulting. In addition, one big contract couldn’t be confirmed for timely delivery. Those two factors combined crushed the stock.
Under the surface, it reflects a bigger industry trend: hardware is squeezing out software’s survival space. Money is rotating from software companies toward hardware. Dell and Micron benefit, while traditional software giants like Microsoft, ServiceNow, and Salesforce face near-term pressure. The logic of AI disrupting traditional software business models is unlikely to disappear in the short run. For general software, the advice is to be cautious. Compared with that, network security and data analytics companies deeply tied to AI may be more resilient.

Big banks deliver good news in earnings across the board, and the banking sector stands out
The earnings from three top US banks—JPMorgan, Bank of America, and Goldman Sachs—were all very strong. Their roles are also clear: JPMorgan has the broadest business and the strongest risk resilience, continuing to act as a stabilizing “anchor” for the broader US market, supported by its large trading services and ample cash flow. Bank of America benefited from the huge turbulence driven by geopolitics and inflation, boosting trading fee income and spread income, and it also captured investment-banking upside from AI-related corporate debt issuance and M&A. Goldman Sachs is the biggest leader of the financial sector rally this time. As a pure top-tier investment bank, it deeply enjoys the large consulting fees generated by this AI cycle of real-economy capex and M&A and restructuring. On top of that, earlier it exited the retail loss-making business tied to cooperation with Apple, fully addressing its weakness—meaning it has the greatest upside leverage among the three. Citigroup looked relatively weaker because management said on the call that expenses rose, and the stock pulled back.

South Korea’s policy rescue boosts a synchronized rally in storage and semiconductors
South Korea’s four major regulators set up a joint coordination mechanism. This Thursday, they issued regulatory details targeting single-stock leveraged ETFs, aiming to prevent small and mid-cap tech stocks from flashing into disorderly collapses. After the news broke, the KOSPI quickly flipped higher; SK Hynix surged, lifting the entire US storage and semiconductor complex as well. A major ongoing development: driven by SK Hynix’s US listing push, Samsung Electronics is also considering issuing US-listed depositary receipts. Samsung’s stock has already gained about 120% year to date, and its market cap has surpassed $1 trillion.
Another “blow-the-lights-out” positive surprise along the semiconductor and testing equipment line: AEHR’s earnings far exceeded expectations. Earnings per share reached $0.11 (the market had expected a loss). Gross margin jumped sharply, and guidance was raised significantly—from the originally expected $80 million up to between $130 million and $150 million. It directly contradicts the idea that “the chip cycle is dead.”

Next, keep a close eye on ASML’s upcoming earnings report. The key focus is the Bookings data: if orders are strong, it could lift memory (Micron, SK Hynix, Samsung) and the entire semiconductor sector in one move. TSMC’s guidance is also an important validation window.

Technicals: the broader market keeps stabilizing above key moving averages, and the ongoing positive Gamma structure supports further upside
The S&P 500 has mostly held a slight uptrend recently (daily gains of 0.36% to 0.38%). After edging out of the prior triangle consolidation’s upper boundary, it has already stabilized above the breakout level for several trading days. Technically, the breakout’s validity is relatively high. In the short term, the first target is the prior high at 7,630, followed by 7,700 and 7,800.
The Nasdaq’s gains were more pronounced (it was up as much as 0.9% to 1.12% at one point daily). Although it’s still inside the triangle consolidation and has not yet achieved a clear breakout, it has already moved above the 10-day and 20-day moving averages. Since early July, the broader market has been oscillating near major moving averages and has formed a structure of “higher lows,” with downside momentum shifting into an upward bias. The Dow Jones has continued a steep upward trend, keeping a higher probability of continued gains.

From options data: this week’s positive Gamma exposure for expiring options concentrates in the 7,500 to 7,600 range. Although earlier bearish flows net-injected downside pressure that capped price around 7,550, as long as overhead sell pressure is gradually consumed, a breakout is basically a matter of time. This week’s target is for the S&P to stabilize and push into a 7,600-point sprint.
For SPY, it is only about 1.12% away from its all-time high. Overhead resistance is at 756 (after a break, watch 758 and the all-time high around 760). Support is the day’s low; if that level is lost, it could trigger a deep pullback, taking it down toward the 740 support zone. With earnings season formally starting, the gap between individual-stock implied volatility and index implied volatility has widened further. That means stock-level swings ahead are likely to be noticeably higher than the broader market itself.

Institutions are quietly accumulating using late-session trades
Some stocks (for example, SK Hynix-related names and CrowdStrike) showed extremely large volume in the final stretch before the 3:50 PM close (Market on Close), indicating that institutions are taking advantage of the window when retail investors exit earlier in the day. They are then quietly building positions by sweeping shares in the late session. CrowdStrike also saw institutional orders at the million-share level in the late session, suggesting strong accumulation. The overall network security sector is also right on the edge of a breakout surge. These late-session volume-and-price rising anomalies are often a leading signal for whether the subsequent trend can continue, and they’re worth watching closely.

A few technical breakout candidates to pay attention to
Dell Technologies: after a gap-up open to 450 following its May earnings, the stock has been digesting consolidation in the 400 to 450 range for about two months. Recently, it has repeatedly formed a rounded-bottom structure with continuous upside arcs above the 10-day, 20-day, and 50-day moving averages. Options data shows large positive Gamma exposure already built up in the 500 to 600 strike range. Upward momentum could trigger a fresh leg higher at any time.
Korean ETF (EWY): after a prior selloff caused by forced liquidations from margin issues and subsequent washout, the chart has shown signs of a strong rebound after the initial pattern failure. On the 4-hour chart, the MACD histogram shows bullish divergence (turning from red to green), suggesting that a bottom may be in construction in the near term.
Small caps (IWM): constrained by overhead resistance above 295 and supported by negative Gamma exposure under 290, overall the stock is consolidating in a 290 to 300 range.

Summary
Today’s market action has a core logic happening in parallel: CPI cooling sharply and the withdrawal of the Hormuz Strait charging policy both remove two short-term black swans that had been weighing on sentiment. The big three top-tier banks reported good earnings across the board, validating the health of the financial system. IBM’s blow-up clearly reveals the main capital-rotation line under the current AI wave: hardware is squeezing software. Software faces near-term pressure, while hardware, storage, and semiconductors continue to benefit. Technically, both the S&P 500 and the Nasdaq are stabilizing above key moving averages. The positive Gamma structure continues to support the possibility of a push toward 7,600 and potentially even higher. Overall, after absorbing a round of sentiment-driven disturbances, the market has regained direction. In the short term, volatility will likely be amplified by the start of earnings season, but the macro and liquidity logic supporting upside for the broader market has, for now, not been broken.