Commercial Awareness Update: July 18th 2026

Catch-up: The Non-Target Playbook | Deep Dive: How to Master the Two-Sided Take | Commercial Awareness Update: The June Wrap 2026 | Career Advice: Perfect Your CV Before Application Season Kicks-Off

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Big week for earnings. Three stories worth understanding properly.

Here's what we're covering:

Let's get into it.

On Tuesday morning, all five of America's largest banks reported Q2 earnings on the same day.

Every single one of them beat analyst estimates. JPMorgan posted a $21.2 billion quarterly profit — the highest in the history of US banking. Goldman Sachs saw net earnings surge 78% year on year. Bank of America's investment banking fees jumped 50%. JPMorgan's investment banking revenue rose 45%.

The numbers were extraordinary across the board.

And the single biggest reason was a deal that closed on 12th June.

The SpaceX IPO.

Goldman Sachs led the offering. JPMorgan, Bank of America, and Citigroup were among the primary co-underwriters. The banks collectively earned around $500 million in underwriting fees from that one transaction. Then, beyond the fees, each bank benefited from subsequent debt financing for SpaceX, new wealth management clients from employees and early investors who became wealthy overnight, and the broader market activity that the listing generated.

Goldman's equity underwriting revenue rose 130% year on year. JPMorgan's equity trading revenue surged 86%. JPMorgan's CFO Jeremy Barnum put it plainly on the analyst call: "These are booming environments with a ton of activity, big IPOs, big index rebalancings."

Goldman's CEO David Solomon added something worth paying attention to: the firm's investment banking backlog is at its highest level in five years. A backlog just means the pipeline of deals that have been mandated but not yet completed. The highest backlog in five years suggests the second half of 2026 could be as strong as the first, with the Anthropic IPO, continued M&A activity, and ongoing AI-related debt issuance all in the pipeline.

Why this matters for your career specifically.

This is one of the clearest illustrations of how investment banking revenue actually works. The banks didn't just make money on the SpaceX deal from underwriting fees alone. They made money on the follow-on debt issuance. They made money on the wealth management relationships that came from the deal. They made money on the trading volumes generated by the listing and index inclusion. One landmark transaction rippled through every business line simultaneously.

That's the integrated model that makes the major investment banks so valuable to understand as institutions, and so worth targeting as an employer if you want to be at the centre of the largest transactions in the world.

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On the same morning that JPMorgan posted the highest quarterly profit in US banking history, IBM reported a preliminary earnings miss that sent its stock down 25.2%.

That's $67 billion in market value erased in a single session. The worst single-day decline in IBM's history, going back to 1911.

Here's what actually happened, because the mechanism matters more than the number.

IBM missed Q2 revenue expectations by about $650 million, coming in at $17.2 billion against a consensus forecast of $17.85 billion. The shortfall was concentrated in two areas: its z17 mainframe business and its transaction processing software.

CEO Arvind Krishna's explanation in his letter to investors was honest and specific. In the final weeks of June, enterprise clients shifted their capital expenditure budgets away from software and mainframes and toward servers, storage, and memory. Why? Because there's a global shortage of memory chips right now, and companies were rushing to secure supply before prices rose further. That scramble to lock in hardware ate into budgets that would otherwise have been spent on IBM's software and mainframe products, and several large contracts that were expected to close before quarter-end slipped.

Here's the insight that makes this more than just an IBM story.

The question worth asking is whether this is a company-specific problem or a signal about enterprise technology spending more broadly.

The IBM-specific read is relatively benign. The z17 mainframe programme is actually tracking at 130% of the comparable z16 cycle at the same point, which suggests the underlying product is healthy. The missing deals may well show up in Q3. If clients simply deferred spending rather than cancelling it, the revenue comes back.

The broader read is more uncomfortable. If enterprise budgets are being consumed by the scramble for scarce AI hardware, that's money not being spent on software, services, and the kind of long-cycle infrastructure projects that companies like IBM, SAP, and Oracle depend on. It raises a genuine question about whether the AI infrastructure spending boom is actually cannibalising other parts of the enterprise technology market rather than simply adding to them.

We'll know more when IBM reports its full Q2 results on 22nd July. If consulting revenue is also soft — consulting is usually the most economically sensitive of IBM's divisions — that would suggest the pressure is broader than one product cycle. Watch that number closely.

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On the same Tuesday that five big banks reported earnings and IBM issued its profit warning, the June Consumer Price Index landed.

Headline inflation fell to 3.5% in June, down from 4.2% in May. That's the largest single-month fall in inflation this year, and it largely reflects the drop in energy prices that followed the Iran ceasefire agreement signed in mid-June.

Kevin Warsh appeared before the House Financial Services Committee the same morning to give his first Congressional testimony as Fed Chair. His message was notably more optimistic than the hawkish tone of the June FOMC meeting: "Price stability is on the horizon. Inflation will be a thing of the past."

That's a meaningful shift in tone from a man who, just three weeks ago, chaired a meeting where nine of eighteen officials projected at least one rate hike before year end.

What's actually going on here, and what happens next.

The June inflation number is genuinely good news, but it comes with an important caveat. A significant portion of the fall is driven by energy prices, which in turn reflects the Iran ceasefire easing supply concerns. As we covered in Monday's update, that ceasefire is already showing cracks, with fresh attacks on shipping in the Strait of Hormuz and Trump saying at the NATO summit "for me, I think it's over."

If the Iran situation deteriorates again and oil prices climb back toward $100, the June CPI print could prove to be a false dawn. Inflation that falls in June because of a temporary energy price reduction can easily rebound in July and August if the underlying supply disruption resumes.

Markets are currently pricing in a rate cut in September with probability rising. Whether Warsh actually delivers that cut depends heavily on two things that are genuinely uncertain right now: whether the Iran peace holds and what the July and August inflation prints show. His stated data-dependency means he's told markets exactly what to watch, which is unusual clarity from a Fed chair who has otherwise been deliberately less transparent than his predecessor.

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Three stories from one extraordinary Tuesday, and they all connect in a way that's worth sitting with.

The big banks' record earnings, the IBM crash, and the inflation print all reflect different sides of the same underlying dynamic. An enormous amount of capital is flowing into AI infrastructure right now — financing data centres, buying chips, building capacity. That flow is generating record fees for the banks facilitating it, creating a memory chip shortage severe enough to distort IBM's enterprise software sales, and being financed partly through the energy price fall that's now pulling inflation lower.

The AI capital expenditure cycle isn't just a technology story. It's reshaping corporate earnings, supply chains, monetary policy, and capital markets simultaneously.

Being able to articulate those connections, rather than treating each story as isolated, is exactly what commercial understanding looks like in an interview.

That’s all for this issue.

Afzal

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