Goldman Sachs Saves the Dow From IBM's Worst Day in 39 Years

IBM shares crashed 24.9% following CEO Arvind Krishna's warning that customers are shifting IT budgets from software to hardware, delivering the stock's worst single-day loss since 1987. The drop dragged the Dow down 429 points before Goldman Sachs offset the damage with a 7.4% rally after the bank beat second-quarter earnings estimates.

The IBM selloff triggered a sharp rotation into semiconductor stocks. SK Hynix surged 18.5%, Nvidia added 2.6%, and Micron climbed 5.1% as traders repositioned around the hardware spending theme Krishna highlighted. The divergence underscores a fundamental shift in enterprise IT allocation that caught the market off guard.

IBM's collapse marks its steepest decline in nearly four decades, erasing billions in market value in a single session. The severity of the move suggests traders are repricing the company's software revenue outlook aggressively lower. Goldman's earnings beat provided critical support to the Dow, preventing a broader index rout.