Alphabet falls nearly 8% after downbeat profits, heavy AI spend
Indexes: Dow up 0.47%, S&P 500 up 0.19%, Nasdaq down 0.07%
(Updates as of mid afternoon)
By Abigail Summerville and Shashwat Chauhan
The S&P 500 and the Dow increased on Wednesday, as investors began to reject frustrating Alphabet incomes and it-viking.ch weighed the possibility of future rates of interest cuts from the U.S. Federal Reserve.
Google-parent Alphabet dropped 7.3% after publishing downbeat cloud earnings growth on Tuesday and forum.altaycoins.com allocating a higher-than-expected $75 billion investment for its AI buildout this year.
AI-related stocks showed indications of healing after being rocked last week following the skyrocketing popularity of a low-cost Chinese artificial intelligence model established by startup DeepSeek. Nvidia, which registered one of the biggest losses, forum.altaycoins.com was up 3.3% on Wednesday.
"Ultimately, need is not disappearing for AI even with the DeepSeek news. They ´ re all going to need 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, on the other hand, lost 8.2% after CEO Lisa Su said the company's current-quarter information center sales - a proxy for its AI earnings - would fall about 7% from the previous quarter.
On the data front, investors are expecting the January nonfarm payrolls report, expected to be launched on Friday.
U.S. services sector activity suddenly slowed in January in the middle of cooling demand, assisting curb price development, a report from the Institute for Supply Management showed on Wednesday.
"There are some concerns that the Fed might require to reduce much faster, that the economy is slowing, however that ´ s actually favorable news for the marketplaces since they ´ re searching for those Fed rate cuts," Haworth said.
The next Federal Open Markets Committee conference remains in March, and while only 16.5% of traders expect a rate cut then, a bulk of traders expect 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, however flagged uncertainty around the effect of new tariffs, utahsyardsale.com 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 increased 207.53 points, or 0.47%, to 44,763.57, the S&P 500 gained 11.61 points, or 0.19%, to 6,049.49 and setiathome.berkeley.edu 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 genuine estate and utility 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 examination of the iPhone maker.
Fiserv advanced 7.3% as the payments company beat quotes for fourth-quarter earnings, helped by strong demand in its banking and payments processing system.
Markets also await developments on the tariffs front after Trump said on Tuesday he remained in no hurry to speak to Chinese President Xi Jinping to try to pacify a new trade war between the nations.
The Cboe Volatility Index, shiapedia.1god.org called 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 listed below quotes.
Johnson Controls jumped 12.5% as the building solutions company called Joakim Weidemanis as president and raised its 2025 profit projection.
Advancing problems 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 brand-new lows while the Nasdaq Composite recorded 100 new highs and 85 brand-new lows.
(Reporting by Abigail Summerville in New York, 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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