9am Hour: IBM Plunges, Big Bank Earnings Reaction, Tame CPI, Fed's Warsh Heads to the Hill 7/14/26

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Market moving insight and analysis. Join Jim Cramer, David Faber and me, Carl Quintanilla on the opening bell hour of CNBC Squawk on the Street.
Good Tuesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. It was already a jam-packed morning with bank earnings, IBM's downside pre-announce, Warsh on the Hill, but then a cool CPI brought some much-needed relief to bond yields. 10-year coming off the highs of 463 Brent hits 87, that's up a full 20% from recent lows. As Iran hits tankers on the third night of US strikes, gas prices do look to hit $4 a gallon again today in several states. A roadmap is going to begin with shares of IBM taking a hit on pace for maybe the worst day ever, company out with a preliminary Q2 miss along with some blunt comments from the CEO.

**David Faber** (1:39)
Also had five of the nation's six largest banks arrive with quarterly results of their own. We're going to break those numbers down for you. Plus, it's a big event this morning on Capitol Hill. Kevin Warsh, the chairman of the Fed, is going to testify before Congress. It will be the first time he does that since taking his new job.

**Carl Quintanilla** (1:57)
Let's start with IBM tumbling on these preliminary results. Company cites weakness in its software and infrastructure business as clients shifted their spend towards servers, storage and memory.
In advance of potentially some price increases in his letter to investors, Arvind Krishna said, quote, This quarter we faltered. Jim, down 24 P market, I think would be the worst since at least the early 60s.

**Jim Cramer** (2:20)
Yeah. When I spoke to Arvind and Arvind Krishna, the CEO, I mean, pretty abject. Look, there are these concerns. He did not anticipate them putting the magnitude of the CapEx repartization which he mentioned. But I also think that clients were distracted rapidly involving industry-wide cybersecurity. This is mythos.
And both Nikesh Arora on May Have Money, David, and George Kurtz just now from ProwseFrike said, look, they each agreed to thousand companies. They're teams, thousand companies on mythos.

**David Faber** (2:55)
Right.

**Jim Cramer** (2:55)
And mythos has frozen a huge amount of spending that I did not know it had gotten that bad.

**David Faber** (3:01)
Yeah.

**Jim Cramer** (3:02)
So I pass it on to you.

**David Faber** (3:04)
Company reports the actual earnings on the 22nd, so eight days from now. The key, I think, will be, Jim, do they have the confidence to give us some sort of a forecast that the orders that did not come in this quarter will ultimately come in? Because, as they said, companies were perhaps more focused on cyber security or, as they also said, spending on servers, storage and memory, or is this longer term in nature and some real reflection of a lack of execution in terms of their sales force?

**Jim Cramer** (3:38)
Well, I do think that, remember, this is a company that has a mainframe, okay, and the mainframe software stack was disappointing and the mainframe sales were disappointing. The revenue looks like it's almost in live street looking for $17.86 billion.

**Carl Quintanilla** (3:53)
That would be about 1%.

**Jim Cramer** (3:55)
Yeah, but it's at software revenue, which is people looking for 10%, it came in at 5%. Infrastructure revenue down 7%.
That's their mainframe. And so I think, David, my answer is it may not come back.

**David Faber** (4:11)
Really?

**Jim Cramer** (4:12)
Yeah.

**David Faber** (4:13)
Then if that's the case, is it 24% decline in the stock price warrant?

**Jim Cramer** (4:19)
Yeah, I think it is.
I mean, this is hard. A lot of people know, Arvind's done a lot of things very forward looking, but I think this is a fundamental shift of, this is buying compute. This is what we talk about. This is Nvidia and this is SK Hynix and this is Micron. The money's going to another area and I don't know if it flows right back.