As of noon today, the S&P 500 (^GSPC +0.42%) rose 0.26% to 7,535.12, the Nasdaq Composite (^IXIC +1.05%) climbed 0.81% to 26,083.42 on tech strength, and the Dow Jones Industrial Average (^DJI 0.13%) sank 0.19% to 52,401.14 thanks mostly to one name.

Market movers

Shares of IBM (IBM 24.65%) plunged after a profit warning, weighing on the Dow even as bank stocks like JPMorgan Chase (JPM +1.36%) and Goldman Sachs (GS +7.57%) surged after earnings. On the Nasdaq, Tower Semiconductor (TSEM +12.49%) and CleanSpark (CLSK +5.62%) jumped on upbeat company-specific news.

What this means for investors

Big bank results kicked off earnings season on a mostly positive note. Also, this morning, cooler inflation data helped ease bond yields and gave new Federal Reserve chairman Kevin Warsh more room to avoid or delay raising interest rates.

U.S. inflation eased more than expected in June, dropping to 3.5% annually. The Consumer Price Index (CPI) fell by 0.4% month-over-month, primarily driven by a 9.7% drop in gasoline prices.

IBM’s earnings warning negatively impacted the Dow, though. In its Q2 pre-announcement, the company said weakness in its software and infrastructure businesses has hurt results. IBM CEO Arvind Krishna said customers are diverting investments to hardware, including servers, storage, and memory.

While this might prompt investors to reset expectations for IBM’s stock, it also provides further evidence that chip and other hardware makers used in the artificial intelligence (AI) build-out may have more room to run.