What’s News in Markets: IBM’s Warning, Apple’s Comeback, Wall Street Cashes In

0:00This podcast is brought to you by ReliaQuest. Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T dot com. Your money briefing is still on a break, but we'll be back with more personal finance information for you in the future.

0:35Until then, here's the news moving the markets this week.

0:42Hey, listeners, it's Saturday, July 18th. I'm Imani Moise for The Wall Street Journal. And this is what's news in markets. Our look at the biggest stock moves of the week and the news that drove them. Let's dive in. U.S. stocks fell this week as investors weighed strong earnings and a better-than-expected inflation report against rising oil prices. June's Consumer Price Index came in below economists' estimates, easing fears of an immediate interest rate hike. But renewed fighting in the Middle East pushed oil prices higher, raising concerns about where inflation goes from here. Chip stocks also slumped during another volatile week for the AI trade.

1:20Overall, the Nasdaq led the losses, falling 2.9 percent. The S &P 500 declined 1.6 percent. And the Dow ended the week 0.9 percent lower.

1:34The worst performing stock in the Dow this week was IBM. Shares in the blue-chip technology giant plunged 26 percent after the company issued a rare profit warning, triggering the biggest one-day drop in its 115-year history. IBM has spent years positioning itself as a company that helps its customers adapt to the AI era. But this week, the company admitted it was caught flat-footed, and its software and infrastructure businesses fell short of expectations because it didn't react quickly enough to changing market conditions. Analysts say many corporate customers are redirecting technology budgets toward AI infrastructure, like servers and memory chips, leaving less money for some of the software and systems IBM sells.

2:18Investors are now reassessing whether one of America's oldest technology companies can still compete in an industry that's being reshaped by AI. It's a familiar question for IBM, the company that helped send people to the moon, worked on America's social security system, and built a supercomputer that beat humans at jeopardy, has reinvented itself repeatedly over the last century.

2:50Apple briefly reclaimed its title as America's most valuable publicly traded company this week, overtaking AI chip giant NVIDIA. Apple's market cap hit$4.91 trillion during Friday morning trading, momentarily surpassing NVIDIA before the tech giant switched places again midday. The iPhone maker ended the week with a market value of roughly$4.902 trillion, just behind NVIDIA's$4.908 trillion. The swap represents a shift in how Wall Street is thinking about the AI trade. Wall Street appears increasingly confident that Apple can use AI to strengthen its existing ecosystem of iPhone users, even if it was late to the AI race.

3:30Apple shares finished the week nearly 6 % higher. Meanwhile, chip stocks were punished this week, even after Taiwan's semiconductor manufacturing company reported another quarter of record earnings. Shares in TSMC dropped 5%, while NVIDIA stocks slipped 3.9%, and the Philadelphia Semiconductor Index fell almost 10 % after months of explosive gains. Some investors are simply locking in profits, and others are starting to question how much longer the AI infrastructure boom can keep growing at this blistering pace. And finance was one of the best-performing sectors, as Wall Street's record run kept traders, dealmakers, and bankers busy.

4:12The S &P Financial Index rose about 1 % after the nation's biggest banks reported blockbuster earnings. JPMorgan Chase, Goldman Sachs, Bank of America, Citigroup, and Wells Fargo collectively earned more than$49 billion last quarter, a nearly 40 % jump from a year ago. The banks benefited from just about every corner of the market. Underwriters raked in fees from the record-breaking SpaceX IPO, traders cashed in as investors rapidly bought and sold AI stocks, and companies racing to invest in AI turned to Wall Street for financing. J.P. Morgan CEO Jamie Dimon described the conditions as, quote, close to as good as it gets.

4:52But even he cautioned that no bull market lasts forever. J.P. Morgan shares ended the week up 1.4 percent, while Bank of America shares rose 2.7 percent. Shares in Goldman Sachs increased about 1%.

5:09And now you know what's news in markets this week. You can read about more stocks that moved on the week's news in our live markets coverage on WSJ.com. Today's show was produced by Anthony Bansi with supervising producer Melanie Roy. I'm Imani Moise. Have a great weekend and catch you next Saturday.

5:34This podcast is brought to you by ReliaQuest. Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with Agentic Defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T dot com.