Bad surprise, plummeting over 25%! The "Laodeng" of US stock technology collapsed! Fed Chairman, latest statement
The U.S. stock market punishes "exploding performance" particularly harshly. Last night and this morning, the stock price of IBM, the veteran technology giant in the US stock market, suffered a collapse, and finally closed down by more than 25%, the largest single-day decline since "Black Monday" in 1987. The company had previously warned that second-quarter revenue would be lower than market expectations. IBM's plunge did not affect the overall market performance of the U.S. stock market. The three major indexes closed up collectively. Semiconductor, storage, and optical communications concept stocks strengthened across the board. SK Hynix ADR soared by more than 27%.
The U.S. stock market punishes "exploding performance" particularly harshly. Last night and this morning, the stock price of IBM, the veteran technology giant in the US stock market, suffered a collapse, and finally closed down by more than 25%, the largest single-day decline since "Black Monday" in 1987. The company had previously warned that second-quarter revenue would be lower than market expectations. IBM's plunge did not affect the overall market performance of the U.S. stock market. The three major indexes closed up collectively. Semiconductor, storage, and optical communications concept stocks strengthened across the board. SK Hynix ADR soared by more than 27%. Some analysts pointed out that the unexpected cooling of U.S. CPI has significantly weakened expectations of the Federal Reserve raising interest rates in July and promoted a rebound in market risk appetite. IBM plunged 25.21% On July 14th, Eastern Time, after the U.S. stock market opened, IBM's stock price fell sharply. It plummeted by more than 26% at the beginning of the trading day, and by the close, the decline reached 25.21%. For comparison, the company's closing price on October 19, 1987 ("Black Monday") was 23.7%. On the news, IBM's preliminary quarterly sales results fell short of Wall Street analysts' consensus expectations. The company's CEO Arvind Krishna said that customers are significantly tightening their spending and attributed the lower-than-expected performance to customers' large-scale shift of spending to chips and servers. IBM said in a preliminary earnings statement that it expected second-quarter revenue of about $17.2 billion, missing Wall Street analysts' average estimate of $18 billion. The statement showed that sales of IBM's infrastructure business unit were particularly hard hit, unexpectedly falling by about 7%. The company said it is still reviewing its accounts and final results may differ slightly. Krishna said that in response to industry-wide supply shortages, customers have generally shifted capital expenditures to AI servers, data center enterprise-class NAND memory chip equipment, and high-performance DRAM memory components, thereby weakening their spending and budget on the company's software products. In terms of the overall U.S. stock market, the three major indexes closed slightly higher, with the Nasdaq rising 0.9% and the S&P 500 rising 0.38%; dragged down by IBM, the Dow edged up 0.02%. Large technology stocks had mixed gains and losses. NVIDIA rose by more than 4%, Google rose by nearly 2%, Meta, Tesla, and Amazon closed slightly higher; SpaceX fell by more than 2%, Microsoft fell by more than 1%, and Apple fell by 0.77%. Chip stocks strengthened across the board, with the Philadelphia Semiconductor Index rising by more than 2%, Intel and Lam Group rising by more than 4%, Applied Materials and ON Semiconductor rising by more than 3%, and ASML ADR and AMD rising by more than 2%. Storage concept stocks also rose collectively. SK Hynix rose by more than 27%, closing at a 51% premium to Korean common stocks. SanDisk rose by more than 5%, Micron Technology rose by nearly 5%, and Seagate Technology rose by more than 2%. Some analysts pointed out that the unexpected cooling of the U.S. CPI has significantly weakened expectations of the Federal Reserve raising interest rates in July, and the earnings results of large U.S. banks have exceeded expectations, which jointly promoted a rebound in market risk appetite. Bloomberg market strategist Michael Ball pointed out that the cooling of CPI data has shifted the market focus from the two major macro risks that previously dominated the market, rising oil prices and expectations of an interest rate hike in July, to individual stock earnings reports at the micro level. At the same time, the latest speech by Federal Reserve Chairman Kevin Warsh also released a series of policy signals. On July 14th, Eastern Time, Warsh stated in written testimony submitted to the House Financial Services Committee, "Committee members have no tolerance for continued high inflation, and we are collectively committed to restoring price stability." He emphasized that monetary policy is the top priority right now, and if the Fed gets its policy right, the surge in inflation over the past five years will be a thing of the past. According to the latest CPI report, the U.S. CPI rose by 3.5% year-on-year in June, lower than market expectations of 3.8%, and significantly lower than the previous value of 4.2%; it fell 0.4% month-on-month, the first month-on-month decrease in six years; core CPI rose by 2.6% year-on-year, also lower than the expected 2.8%; month-on-month, it recorded 0%, a significant slowdown from the previous value of 0.2%. In this regard, Warsh said: "Although the CPI data released this morning performed better than expected, I do not agree with selective interpretation of the data. I think there is still a lot of work to be done."
During the hearing, Warsh made it clear that if faced with pressure from US President Trump, he would "do his job" and that even if he was criticized by Trump, he would take action based on the data. It was Warsh's most direct comments yet on Trump's challenge to the Fed. Regarding the current AI investment boom, Wash is more cautious. He acknowledged that AI is driving a substantial increase in business investment, but at the same time it has brought new uncertainties to the economy. It is still unclear to what extent the economy can benefit from AI construction. During the hearing, Warsh said that in the long term, AI means substantial productivity improvements. The AI boom is “probably the biggest transformation I’ve experienced in my adult life,” with the technology changing not only the way innovation is done but also the speed at which it happens. According to his speculation, this AI technology will play a role in "augmenting" existing jobs. Although it may have a disruptive impact in the short term, "it will also create many other job opportunities." Warsh said that new opportunities in the economy also bring new challenges to policymakers, and the Fed is closely monitoring its impact on inflation and the labor market. Nick Timiraos, known as the "Fed's mouthpiece", wrote that Warsh reiterated the Fed's goal of controlling inflation, but did not hint at the direction of interest rates, and did not talk much about his views on interest rates at the hearing. This is in line with his consistent assertion that the Fed should not reveal its next steps in advance, and he also did not clearly define the criteria for judging whether high inflation has evolved into sustained inflation. "Wash's message is that we can lower inflation, and that's what his audience wants to hear," said Chuck Carlson, CEO of Horizon Investment Services. "Maybe inflation can come back naturally without the need for another rate hike." (
During the hearing, Warsh made it clear that if faced with pressure from US President Trump, he would "do his job" and that even if he was criticized by Trump, he would take action based on the data. It was Warsh's most direct comments yet on Trump's challenge to the Fed. Regarding the current AI investment boom, Wash is more cautious. He acknowledged that AI is driving a substantial increase in business investment, but at the same time it has brought new uncertainties to the economy. It is still unclear to what extent the economy can benefit from AI construction. During the hearing, Warsh said that in the long term, AI means substantial productivity improvements. The AI boom is “probably the biggest transformation I’ve experienced in my adult life,” with the technology changing not only the way innovation is done but also the speed at which it happens. According to his speculation, this AI technology will play a role in "augmenting" existing jobs. Although it may have a disruptive impact in the short term, "it will also create many other job opportunities." Warsh said that new opportunities in the economy also bring new challenges to policymakers, and the Fed is closely monitoring its impact on inflation and the labor market. Nick Timiraos, known as the "Fed's mouthpiece", wrote that Warsh reiterated the Fed's goal of controlling inflation, but did not hint at the direction of interest rates, and did not talk much about his views on interest rates at the hearing. This is in line with his consistent assertion that the Fed should not reveal its next steps in advance, and he also did not clearly define the criteria for judging whether high inflation has evolved into sustained inflation. "Wash's message is that we can lower inflation, and that's what his audience wants to hear," said Chuck Carlson, CEO of Horizon Investment Services. "Maybe inflation can come back naturally without the need for another rate hike." (