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

Alphabet falls nearly 8% after downbeat revenues, heavy AI spend

Indexes: Dow up 0.47%, S&P 500 up 0.19%, Nasdaq down 0.07%

( since mid afternoon)

By Abigail Summerville and Shashwat Chauhan

The S&P 500 and the Dow rose on Wednesday, as financiers started to brush off disappointing Alphabet incomes and weighed the possibility of future rate of interest cuts from the U.S. Federal Reserve.

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

AI-related stocks showed signs of healing after being rocked recently following the soaring popularity of a low-cost Chinese artificial intelligence design developed by start-up DeepSeek. Nvidia, which signed up one of the biggest 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 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 business’s current-quarter information center sales – a proxy for its AI income – would fall about 7% from the previous quarter.

On the information front, financiers are looking ahead to the January nonfarm payrolls report, anticipated to be launched on Friday.

U.S. services sector activity all of a sudden slowed in January amidst cooling demand, helping curb cost growth, a report from the Institute for Supply Management showed on Wednesday.

“There are some concerns that the Fed might need to relieve much faster, that the economy is slowing, however that ´ s actually positive news for the markets due to the fact that they ´ re searching for those Fed rate cuts,” Haworth said.

The next Federal Open Markets Committee conference remains in March, and while just 16.5% of traders anticipate 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 brand-new tariffs, migration, 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%, to 19,641.11.

Nine of the 11 S&P 500 sectors traded higher, with property and 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 preparing for a possible examination of the iPhone maker.

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

Markets likewise await developments on the tariffs front after Trump said on Tuesday he remained in no hurry to talk to Chinese President Xi Jinping to try to pacify a brand-new trade war between the countries.

The Cboe Volatility Index, known as Wall Street’s worry gauge, dropped 6.3% to 16.1 today.

In business movers, FMC Corp plunged 32% after the agrichemicals manufacturer forecast first-quarter income below price quotes.

Johnson Controls jumped 12.5% as the structure services business called Joakim Weidemanis as president and raised its 2025 earnings forecast.

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 brand-new 52-week highs and dokuwiki.stream 12 brand-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; Editing by Pooja Desai, Devika Syamnath, Maju Samuel and Nia Williams)