US Market Reaction To CPI: Dow Jones, Nasdaq, S&P 500 Gains; Big Banks Top Bulls, IBM Crashes 25%

US Stock Market On July 16:

The Dow Jones closed at 52,508.27, marginally up by 9.63 points or 0.018%. While the S&P 500 surged by 28.25 points or 0.4% to end at 7,543.59 overnight.

Mega banks and financial stocks were top performers with Goldman Sachs gaining by over 9%, JP Morgan rising 2.50% and Bank of America gaining by nearly 2%. Also, AI stocks like Nvidia rallied over 4%, which lifted the Wall Street. Apart from this, chip stocks like Broadcom and Micron zoomed by 1.3% and 4.9% respectively, which played a key role in lifting Nasdaq.

The tech-heavy index, Nasdaq ended at 26,107.01 on July 14th, registering an upside of 233.83 points or 0.90%, which is better than Dow Jones and S&P 500.

Additionally, beyond the stock-specific action, market sentiments were bullish after US CPI inflation rate cooled down for the first time in five months.

US Quarterly Earnings:

Goldman Sachs Results:

Goldman rallied due to surpassing estimates in its quarterly report. The American brokerage house recorded net revenues of $20.34 billion and net earnings of $6.63 billion for the second quarter ended June 30, 2026. Diluted earnings per common share (EPS) was $20.98 and annualized return on average common shareholders' equity (ROE) was 23.5% for the second quarter of 2026.

" For long-term investors, Goldman Sachs' second quarter represents an interesting exercise in avoiding the pitfall of chasing recent performance and of extrapolating recent results in a cyclical industry too far into the future," said a Morningstar's report on the exception earnings of Goldman.

JP Morgan Chase Results:

This financial services provider reported a historic net profit for the second quarter, the highest ever by a US bank in a quarter.

JP Morgan posted revenue of $57.3 billion, while net income stood at $21.2 billion.

Jamie Dimon, Chairman and CEO, commented on the financial results: "The Firm reported very strong results in the quarter, generating net income of $16.9 billion and an ROTCE of 23%, excluding gains related to Visa and certain equity investments. These results were the product of a particularly favorable environment with an elevated level of market activity, as well as rigorous execution, years of consistent investment and thoughtful capital deployment."

Bank of America Results:

The American bank reported a net income of $9.1 billion in Q2 of 2026, compared to $7.2 billion, up 27%. Diluted earnings per share (EPS) of $1.21 compared to $0.90, up 34%. Also, the bank posted net interest income of $16.0 billion ($16.2 billion FTE), up 9%, driven by higher NII related to Global Markets activity, higher loan and deposit balances, and fixed-rate asset repricing, partially offset by the impact of lower interest rates.

CITI Results:

Citi posted a revenue of $24.8 billion, while net income of $5.8 billion in Q2. Its earnings per share stood at $3.15, while return on equity stood at 11.4%.

Citi Chair and CEO Jane Fraser said, "With net income up 45%, this was Citi's best quarterly revenue in a decade with double-digit revenue growth for the firm and in four
out of our five businesses. Services delivered its highest ever quarterly revenue and a
return of over 30%.

IBM Results

Meanwhile, tech player, IBM missed estimates in Q2, which pushed its stock price to crash by up to 25.24%, making it the biggest loser of the day.

IBM's revenue is up to $17.2 billion, up by 1%. While software revenue up 5%. But consultancy revenue was flat and up by 1% in constant currency, and infrastructure revenue plunged by 7%. Its diluted earnings per share stood at $2.27, down by 2%.

Arvind Krishna, Chairman, President, and Chief Executive Officer, IBM said, "While our second-quarter results are disappointing, our performance in many areas showed strength, reinforcing the conviction we have in our portfolio and strategy."

US Inflation:

The annual inflation rate in the US fell to 3.5% in June 2026, the first decline in five months, compared to 4.2% in May and below forecasts of 3.8%. Energy costs increased 15.7%, below 23.5% in May, as the ceasefire between the US and Iran alleviated inflationary pressures from the energy component. Gasoline prices rose 26.7% (vs 40.5% in May) and fuel oil increased 42.9% (vs 58.9%). Inflation also slowed for shelter (3.3% vs 3.4%) and food (3% vs 3.1%). Compared to the previous month, the CPI decreased 0.4%, more than forecasts of a 0.1% drop, and the largest fall since April 2020, as per Trading Economics.

Going ahead, on Wall Street, investors will focus on earnings of Johnson & Johnson, Morgan Stanley, and BlackRock.