US STOCKS-S & P 500, Dow Rise As Investors Digest Earnings, Rate Cut

Alphabet falls almost 8% after downbeat earnings, opentx.cz heavy AI invest

Indexes: Dow up 0.47%, 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 rose on Wednesday, as investors began to reject disappointing Alphabet revenues and weighed the possibility of future interest rate cuts from the U.S. Federal Reserve.

Google-parent Alphabet dropped 7.3% after publishing downbeat cloud earnings growth on Tuesday and earmarking a higher-than-expected $75 billion investment for its AI buildout this year.

AI-related stocks showed indications of healing after being rocked recently following the skyrocketing popularity of an affordable Chinese expert system design developed by startup DeepSeek. Nvidia, which registered one of the most significant losses, was up 3.3% on Wednesday.

“Ultimately, demand is not disappearing for AI even with the DeepSeek news. They ´ re all going to have to invest more cash which ´ s what the AI story has been. This is a fairly long cycle story,” said Rob Haworth, senior investment strategist at U.S. Bank Asset Management.

Advanced Micro Devices, on the other hand, lost 8.2% after CEO Lisa Su said the business’s current-quarter information center sales – a proxy for its AI earnings – would fall about 7% from the previous quarter.

On the data front, financiers are expecting the January nonfarm payrolls report, expected to be released on Friday.

U.S. services sector activity suddenly slowed in January amidst cooling need, assisting curb price development, a report from the Institute for Supply Management revealed on Wednesday.

“There are some concerns that the Fed may require to ease faster, that the economy is slowing, however that ´ s in fact favorable news for the markets due to the fact that they ´ re looking for those Fed rate cuts,” Haworth said.

The next Federal Open Markets Committee conference remains in March, trade-britanica.trade and while just 16.5% of traders expect a rate cut then, a majority of traders prepare for 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 brand-new tariffs, immigration, regulations 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 the Nasdaq Composite lost 12.91 points, or 0.07%, trademarketclassifieds.com to 19,641.11.

Nine of the 11 S&P 500 sectors traded greater, with realty and energy stocks leading the gains while interaction services tipped over 3%.

Shares of Apple slipped 1.2% as Bloomberg News reported that China’s antitrust regulator was preparing for a possible investigation of the iPhone maker.

Fiserv advanced 7.3% as the payments firm beat estimates for fourth-quarter profit, assisted by strong need in its banking and payments processing system.

Markets also await advancements on the tariffs front after Trump said on Tuesday he remained in no rush to speak with Chinese President Xi Jinping to try to pacify a brand-new trade war in between the countries.

The Cboe Volatility Index, called Wall Street’s fear gauge, dropped 6.3% to 16.1 today.

In corporate movers, plunged 32% after the agrichemicals producer projection first-quarter revenue below estimates.

Johnson Controls leapt 12.5% as the building solutions business named Joakim Weidemanis as ceo and raised its 2025 revenue forecast.

Advancing issues 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 posted 31 new 52-week highs and 12 brand-new lows while the Nasdaq Composite taped 100 brand-new highs and 85 brand-new lows.

(Reporting by Abigail Summerville in New York City, Shashwat Chauhan and Sukriti Gupta in Bengaluru; Editing by Pooja Desai, Devika Syamnath, Maju Samuel and Nia Williams)