IBM and the Market’s Mood: 8 Key Items Shaping the Stock Market Tuesday

These are the early headlines and other items poised to influence the market at the start of trading Tuesday. As we share this collection of market drivers, U.S. equity futures point to a mixed open.

1. President Donald Trump formally notified lawmakers this weekend that the nation is once again at war with Iran, giving his administration another 60-day clock to use the military in the region without congressional approval. (Politico) Hostilities have intensified since Iran said late on Saturday it had closed the Strait of Hormuz ‌after firing ⁠a warning shot that struck a vessel travelling on what it said was an unauthorised route. On Monday, Trump said the strait was open and would remain open, with or without Iran. But the number of tankers transiting the strait has fallen to the lowest level in nearly two months, according to shipping data on Monday. (Reuters)

Rising oil prices and renewed uncertainty are back in the market as hostilities between the U.S. and Iran flare up. We’ll repeat our comment from yesterday that the duration of these hostilities, what they mean for potential peace talks and the volume of ships passing through the strait are our primary area of focus. President Trump is expected to address the nation Thursday at 9:00 PM ET, and we’ll be looking for clues on what to expect.

In addition to those renewed geopolitical tensions and uncertainties, IBM’s (IBM) shares are plummeting on weaker-than-expected preliminary Q2 2026 earnings. The size of that pre-market fall for a $0.07 per share miss relative to the $3.01 EPS market consensus tells us quite a bit about the market mood. In the coming weeks, companies looking to avoid the same share-price pain will need to deliver clean quarterly beats and solid guidance. Of course, the other side of that coin is that some quality companies could be going on sale, and that means we will be rolling up our sleeves.

2. The Bureau of Labor Statistics is set to release the June consumer price index on Tuesday at 8:30 a.m. Eastern. Economists surveyed by FactSet expect inflation to post an outright decline of 0.2% for the month, largely driven by the dip in gasoline prices in June. That monthly bout of deflation is expected to translate into an annual print of 3.8% for June, a pullback from the peak of 4.2% in May. (Barron’s)

Based on the June data we’ve seen so far, we are in the camp that expects the June CPI report out today and June PPI tomorrow to show favorable year-over-year data compared to May. However, renewed U.S.-Iran hostilities, subject to their duration, has the potential to curb further progress in the July and August data. As we see it, that suggests the market is likely to read through this week’s June CPI and PPI reports. Still, we’ll have more thoughts to share on both as the numbers are released.

3. New Federal Reserve Chairman Kevin Warsh is heading to Capitol Hill this week to testify before Congress regarding the state of economic policy and the wider U.S. economy. Markets should not expect the two-day hearings to provide much new insight into the central bank’s next move. Warsh will testify before the House Financial Services Committee on Tuesday at 10 a.m. Eastern and then appear in front of the Senate Banking Committee on Wednesday. (Barron’s)

Typically the first day of this back-to-back testimony by a Fed Chair is the one we and the market focus on. However, after what we’ve seen with Warsh’s recent public-facing comments, we are not expecting much insight or granularity into what he’s thinking lies ahead for monetary policy. We’ll continue our practice of triangulating multiple data sets, letting the data talk to us and based on what it says, we’ll adjust the Pro Portfolio’s positioning as needed.

4. Ericsson shares on Tuesday saw their worst reaction to earnings in nearly three years after the telecom-equipment maker revealed that rising component costs were eating away at margins — likely the huge surge in memory-chip prices. (MarketWatch)

Looking ahead, Ericsson (ERIC) expects profitability to come under pressure in Q3 as AI-driven demand for semiconductors increases component costs. “As the impact builds in the coming quarters, we will continue to pursue internal measures and pricing actions to help offset the effect. We also expect some pressure on Networks adjusted gross margin in Q3 due to higher volumes of network rollout projects,” said Börje Ekholm, President and CEO.

Ekholm’s comments are another indication of inflation tailwinds brewing in the tech sector, but they also reaffirm the robust outlook for networking demand as AI adoption rises and usage widens. We’ll be on guard for the former, but the latter reaffirms our bullish stance on Arista Networks (ANET), Marvell (MRVL), Broadcom (AVGO) and Nvidia’s (NVDA) networking business.

5. Quarterly numbers from five major banks including Bank of America, Citigroup and Goldman Sachs, plus commentary from Jamie Dimon and his peers, will be closely scrutinized for clues as to the health of the U.S. economy. Their Wall Street operations are expected to be a bright spot, most notably thanks to the blockbuster SpaceX IPO. (WSJ)

Initial reactions to these Q2 2026 reports from Goldman Sachs (GS) and JPMorgan Chase (JPM) are quite different with GS shares rising while those for JPM are moving lower in pre-market trading. As expected, investment banking, asset management and market trading operations were key drivers of better-than-expected quarterly results for both. Our own Bank of America (BAC) delivered better-than-expected EPS of $1.21 compared to the $1.13 market forecast on revenue that rose just under 20% year over year to $31.7 billion, topping the market consensus of $30.78 billion.

We’ll have more on BofA’s results after this morning’s earnings conference call.

6. Samsung Electronics Co. is in the early stages of exploring a potential offering of American depositary receipts, according to people familiar with the matter. The company has held preliminary discussions with banks, but hasn’t yet made a decision about whether to proceed, the people said, asking not to be identified discussing private deliberations. (Bloomberg)

Following the offering by SK Hynix (SKHV), this potential move by Samsung (SSNLF) should not be a surprising one. If the company elects to go forward, it would be another potentially massive offering that would be wonderful for investment banking fees, but it also has the potential to suck capital from other areas of the market. It’s on our radar screen.

7. Economic data today per TipRanks: NFIB Small Business Optimism Index (June), Consumer Price Index (June), Fed Chair Warsh testimony.

8. Companies reporting today per TipRanks: AM – Bank of America, Citigroup, Ericsson, Fastenal (FAST), Goldman Sachs, JPMorgan Chase, Wells Fargo (WFC).