Alphabet falls nearly 8% after downbeat incomes, heavy AI invest
Indexes: Dow up 0.47%, gratisafhalen.be S&P 500 up 0.19%, Nasdaq down 0.07%
(Updates since mid afternoon)
By Abigail Summerville and Shashwat Chauhan
The S&P 500 and the Dow increased on Wednesday, as investors started to brush off disappointing Alphabet earnings and weighed the prospect of future rates of interest cuts from the U.S. Federal Reserve.
Google-parent Alphabet dropped 7.3% after publishing downbeat growth on Tuesday and earmarking a higher-than-expected $75 billion investment for its AI buildout this year.
AI-related stocks revealed indications of healing after being rocked recently following the soaring appeal of a low-cost Chinese synthetic intelligence design established by startup DeepSeek. Nvidia, which registered among the biggest losses, was up 3.3% on Wednesday.
"Ultimately, need is not going away for AI even with the DeepSeek news. They ´ re all going to have to invest more money and that ´ s what the AI story has been. This is a fairly long cycle story," said Rob Haworth, senior financial investment strategist at U.S. Bank Asset Management.
Advanced Micro Devices, meanwhile, lost 8.2% after CEO Lisa Su said the business's current-quarter data center sales - a proxy for its AI revenue - would fall about 7% from the previous quarter.
On the data front, investors are expecting the January nonfarm payrolls report, anticipated to be launched on Friday.
U.S. services sector activity suddenly slowed in January amid cooling demand, helping curb price development, a report from the Institute for Supply Management showed on Wednesday.
"There are some concerns that the Fed may require to alleviate much faster, that the economy is slowing, however that ´ s really positive news for the marketplaces because they ´ re looking for those Fed rate cuts," Haworth said.
The next Federal Open Markets Committee meeting remains in March, and while just 16.5% of traders anticipate a rate cut then, a bulk of traders anticipate a cut in June, according to CME's FedWatch Tool.
Richmond Fed president Thomas Barkin said the Fed was still leaning towards more rate cuts this year, but flagged uncertainty around the effect of brand-new tariffs, migration, guidelines and other efforts from U.S. President Donald Trump's administration.
At 2:00 p.m. ET (1900 GMT), the Dow Jones Industrial Average rose 207.53 points, or 0.47%, wiki-tb-service.com to 44,763.57, the S&P 500 gained 11.61 points, or 0.19%, to 6,049.49 and the Nasdaq Composite lost 12.91 points, or 0.07%, to 19,641.11.
Nine of the 11 S&P 500 sectors traded greater, with property and larsaluarna.se energy stocks leading the gains while interaction services fell over 3%.
Shares of Apple slipped 1.2% as Bloomberg News reported that China's antitrust regulator was getting ready for a possible investigation of the iPhone maker.
Fiserv advanced 7.3% as the payments company beat estimates for fourth-quarter revenue, helped by strong need in its banking and payments processing unit.
Markets likewise await advancements on the tariffs front after Trump said on Tuesday he remained in no hurry to speak with Chinese President Xi Jinping to try to defuse a new trade war between the countries.
The Cboe Volatility Index, understood as Wall Street's fear gauge, dropped 6.3% to 16.1 today.
In business movers, FMC Corp plunged 32% after the agrichemicals producer forecast first-quarter revenue below quotes.
Johnson Controls leapt 12.5% as the building services business named Joakim Weidemanis as ceo and raised its 2025 profit forecast.
Advancing concerns outnumbered decliners by a 2.62-to-1 ratio on the New York Stock Exchange, and by a 1.88-to-1 ratio on the Nasdaq.
The S&P 500 published 31 new 52-week highs and 12 new lows while the Nasdaq Composite tape-recorded 100 brand-new highs and 85 new lows.
(Reporting by Abigail Summerville in New York City, Shashwat Chauhan and Sukriti Gupta in Bengaluru
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US STOCKS S & P 500, Dow Rise As Investors Digest Earnings, Rate Cut
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