Stock market undergoing red trends, attributed to Big Blue's influence
IBM's Strong Q2 Results and the Federal Reserve's Upcoming Meeting
In the world of business and finance, two significant events have caught the attention of investors this week. Firstly, International Business Machines (IBM) reported impressive second-quarter results, exceeding estimates, and solidifying its full-year guidance. Secondly, the Federal Reserve is set to hold its meeting on July 29-30, 2025, with expectations of maintaining the federal funds rate at 4.25%-4.5%.
IBM's Q2 performance was particularly noteworthy, with retail interest evident in the options market. Several retail favourite options names saw substantial trading volume. The company reported earnings of $2.80 per share on revenue of $17.0 billion.
Meanwhile, the Nasdaq Composite made a new closing high, up 0.2% to 21,058. The S&P 500 also reached a new high, rising 0.1% to 6,363. Other notable performers included Nvidia, Alphabet, Microsoft, and Amazon.com, which were up on their respective days.
However, Tesla missed expectations with its second-quarter earnings report, causing a spin into reverse during the after-market session. Apple, on the other hand, fell late in the trading session.
As for the Federal Reserve, the expected outcome is a steady federal funds rate. Yet, watch for any signals or dissenting votes suggesting future cuts, particularly from Fed Governor Christopher Waller, who has shown openness to a rate cut.
The Fed's meeting will also provide updates on economic projections, policy statement tone and language, quantitative tightening and balance sheet, and Powell’s press conference signals. Investors will closely analyze these factors for any indication of "data dependency" and future policy adjustments.
In the midst of elevated inflation risks and a moderately restrictive monetary policy environment, the Fed is maintaining a cautious stance. The meeting will be crucial in understanding the Fed's future policy decisions and their potential impact on the market.
Meanwhile, Stifel analyst David Grossman reiterated his Buy rating and a $310 12-month target price for IBM, indicating a positive outlook for the tech giant's future performance.
[1] Federal Reserve Meeting Preview: What to Expect (CNBC, 2025) [2] Federal Reserve Expected to Keep Rates Steady (Bloomberg, 2025) [3] Fed Officials Divided Over Rate Cuts (Wall Street Journal, 2025) [4] IBM Reports Q2 Earnings (Yahoo Finance, 2025) [5] Fed Meeting Preview: What Investors Should Watch (Barron's, 2025)
When discussing the upcoming Federal Reserve meeting, it's important to consider the potentially steady federal funds rate, but also be on the lookout for any indications of future cuts, especially from Fed Governor Christopher Waller. In the stock-market, IBM's Q2 earnings performance has generated retail interest, with options trading volumes increasing, and analyst David Grossman reiterating his positive outlook for the tech giant's future performance in finance investing.
