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

The week’s market action was a study in contradictions: a cooler-than-expected inflation report was immediately overshadowed by rising oil prices, and a blockbuster earnings season for Wall Street’s biggest banks did little to lift the broader market. The result was a losing week for U.S. stocks, led by a 2.9% drop in the Nasdaq. The S&P 500 fell 1.6%, and the Dow managed a modest 0.9% decline. The dominant story was a brutal reassessment of two very different giants: IBM, which suffered a historic collapse after a rare profit warning, and the entire semiconductor sector, which stumbled even as Taiwan Semiconductor reported record earnings.

IBM’s 26% Plunge: A 115-Year-Old Company Caught Flat-Footed

The worst-performing stock in the Dow this week was IBM, which plunged 26% after issuing a profit warning. It was the single biggest one-day drop in the company’s 115-year history. The company, which has spent years repositioning itself as an AI-era consultant, admitted it was caught flat-footed. Its software and infrastructure businesses fell short of expectations because it did not react quickly enough to changing market conditions.