U.S. equity markets delivered a mixed close on Thursday as investors parsed corporate earnings, geopolitical headlines, and macroeconomic developments, with sharp moves in IBM and ongoing AI infrastructure speculation dominating the day’s trading.

The Dow Jones Industrial Average fell 316.20 points, or 0.70%, to 44,694.1, weighed down heavily by a more than 5% drop in IBM shares following the company’s earnings release. In contrast, the Nasdaq Composite eked out a gain of 37.94 points (+0.18%) to 21,058.0, and the S&P 500 edged up 4.46 points (+0.07%) to close at 6,363.37.

IBM Dragged the Dow Lower

IBM shares slumped 5.5% after reporting second-quarter earnings that, while beating top- and bottom-line expectations, exposed a weak spot in the company’s software division. Despite a robust showing from its infrastructure and AI segments — including a 70% jump in IBM Z hardware revenue and $7.5 billion in generative AI bookings — the softness in software margins prompted investors to lock in profits following a 28% rally year-to-date. IBM’s updated full-year free cash flow forecast of over $13.5 billion and a Q2 cash flow of $2.8 billion failed to reverse the sell-off.

Trump’s Fed Visit and the Powell Drama

Adding a dose of political theater to the session, President Donald Trump paid a high-profile visit to the Federal Reserve to inspect a $3.1 billion construction project. Accompanied by Fed Chair Jerome Powell, OMB Director Russ Vought, and Senators Tim Scott and Thom Tillis, the visit underscores a growing intersection between federal infrastructure priorities and monetary policy visibility

I Infrastructure Boom Pushes Energy Sector

A broader market narrative continued to build around the booming U.S. investment in AI infrastructure, which is expected to significantly boost electricity consumption. While this may pinch consumers through higher utility prices, investors see a long-term opportunity. ETFs such as XLU, GRID, and TAN — covering utilities, grid modernization, and renewable energy — gained traction as data centers expand their already substantial 1–2% share of global power demand.

ECB Holds Steady, Global Markets React

Across the Atlantic, the European Central Bank kept key interest rates unchanged, citing emerging economic momentum in the eurozone. Though widely expected, the ECB’s unusually terse policy statement left analysts guessing about future moves. Still, optimism over a potential 15% U.S.-EU tariff agreement and strong services PMI data in Germany helped push the Euro Stoxx 600 to six-week highs.

Commodities Mixed, Treasuries Stabilize

On the commodities front, crude oil (Sep 25) rose 1.53% to $66.25, while gold (Aug 25) slipped 0.64% to $3,375.70. In the bond market, the 10-year Treasury yield ticked up slightly to 4.4080%, and 2-year yield futures (Jul 2025) rose to 3.8210%, reflecting investor recalibration amid central bank policy stability.