Here is Schwab's early look at the markets for Wednesday, July 15.
Following a Tuesday that might have been the busiest day of the quarter, there's little chance for investors to catch their breath.
Earnings from Morgan Stanley and chip infrastructure company ASML loom, along with wholesale prices data and another day of Capitol Hill testimony from Federal Reserve Chairman Kevin Warsh.
Warsh sounded both hawkish and enthusiastic in his remarks to the House yesterday, notably saying the Fed has "no tolerance" for persistently elevated inflation. Still, he pointed to business spending strength and overall economic resilience despite the war, which re-ignited this week and remains an undercurrent as President Trump re-initiated a blockade of Iran's oil and both sides continued exchanging fire.
"Economic activity is expanding at a solid pace," Warsh said, adding that household consumption growth is moderate and manufacturing output has moved up steadily. "The most striking feature of the economy right now is business investment."
The surge in oil, which rose 2% Tuesday to near $80 per barrel and is up 16% from recent lows, put yesterday's CPI report in an unusual light. It showed a significant June inflation decline related to what then were lower oil prices.
CPI came in better than expected at -0.4% monthly, while core CPI, excluding food and energy, was flat. On an annual basis, headline inflation of 3.5% descended sharply from May's 4.2% and was below Wall Street's expectation of 3.8%. The core rate fell to 2.6% annually, below the 2.9% expectation.
Odds of a July Fed rate hike dove late Tuesday to just 16.6% from 42% a day earlier, likely reflecting the light CPI data. Odds of at least one hike by September still stand near 55%, but that's down from 75% on Monday.
"One month does not make a trend, but it was good news on CPI," said Cooper Howard, director of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). "The easing in headline was largely expected due to energy prices, but the decline in core from May was welcomed. It likely means the Fed won't be in a rush to hike rates."
Items besides energy that got cheaper last month included car insurance, apparel, medical care, and used cars and trucks, the Bureau of Labor Statistics (BLS) said.
Warsh told Congress that the weaker-than-expected CPI was just one month of data, not "mission accomplished."
Today at 8:30 a.m. ET, market participants brace for the June Producer Price Index (PPI). Consensus is 0.1% for headline and 0.4% for core PPI, compared with 1.1% and 0.4% in May, respectively, Briefing.com said.
Wholesale prices represent what businesses pay for goods. If PPI keeps rising, it could eventually translate into higher prices at the store. Some elements of PPI also factor into the Personal Consumption Expenditures (PCE) price index, the Fed's favored reading on inflation due later this month.
Earnings season unofficially began yesterday with a gaggle of the largest U.S. banks. Most impressed, especially in markets and underwriting, but shares went different directions. Some of the best quarters didn't get rewarded, possibly because banks rallied into the reports.
Morgan Stanley, due before the open, wraps up the big banks. The wealth management business is an important tracker. Capital markets activity will likely be a focus, as well, after competitor Goldman Sachs reported a strong quarter. Blackrock is another financial firm to watch today.
Earnings today from ASML and tomorrow from Taiwan Semiconductor Manufacturing put the chip business into primary focus. Both serve as helpful demand barometers ahead of results from hyperscalers in coming weeks.
Earlier this week, TSM reported a 36% year-over-year revenue increase in the second quarter, with revenue accelerating in June.
Other key earnings include United Airlines later today and Netflix tomorrow afternoon.
Major U.S. indexes rebounded Tuesday from Monday's rough start, lifted by the chip sector and hopes that inflation might be peaking, though there was no sign of the war calming. On the other hand, President Trump backed off from a threat to impose 20% fees on cargo transiting the Strait of Hormuz, which might have cooled some of oil's simmer.
Treasury yields eased moderately Tuesday, with the biggest drops for yields of short-term notes most exposed to Fed policy. "Additional yield upside seems limited," Howard said.
Seven of 11 S&P 500 sectors climbed Tuesday, led by info tech and communication services. Financials also rose despite the mixed reaction to bank earnings. Health care finished last, down nearly 2%, after HCA reduced its 2026 earnings guidance, citing an unfavorable payer mix shift, Briefing.com reported. Despite a rise in the S&P 500 Index, more stocks were down than up by late in the session.
The percentage of S&P 500 stocks trading above their 50-day moving averages is 63%, roughly where it’s been most of this month and a healthy market breadth figure, historically.
Among individual movers Tuesday, IBM crumbled more than 25% in its worst day ever after saying it expects second quarter results below Wall Street's consensus. Lower-than-expected growth in the company's software and infrastructure businesses led to the shortfall as customers spent more on chips and cybersecurity trying to get ahead of price increases, Barron's reported.
JPMorgan Chase rose more than 2% after its best quarterly profit ever as equity trading revenue climbed 86% year over year.
Citigroup plunged 5% despite exceeding analysts' estimates almost across the board and pulling in record quarterly revenue. Equities revenue jumped 45% year over year, but analysts expressed concerns about expenses, The Wall Street Journal reported.
Goldman Sachs climbed 9% on earnings that blew past Wall Street's estimates, powered by the underwriting business and a 53% annual jump in global banking and markets revenue.
Software stocks, which climbed Monday as chips descended, reversed course Tuesday with drops for Workday, Salesforce, and Adobe, after IBM's bad news reignited concerns that spending was turning toward chips and away from software.
Chip stocks reversed Monday's losses Tuesday, helped in part by IBM's announcement. Leading the way was SK Hynix, up 27% after Barclay's initiated coverage with an overweight rating. Intel, Micron, Lumentum, and Sandisk also rose sharply.
Cyber security stocks Palo Alto Networks and Crowdstrike climbed sharply after IBM's CEO said businesses are focused on cyber security spending to counter AI-induced threats and passing up major deals in the meantime.
Automotive firm Lucid toppled 41% at midday, but the company called "completely false" a report in a trade publication that it's considering filing for bankruptcy or going private. Shares recovered most of their losses but still lost 16%.
The Dow Jones Industrial Average® ($DJI) rose 9.63 points (+0.02%) Tuesday to 52,508.27; the S&P 500 Index (SPX) added 28.25 points (+0.38%) to 7,543.59, and the Nasdaq Composite® ($COMP) climbed 233.83 points (+0.90%) to 26,107.01.
