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

Alphabet falls almost 8% after downbeat incomes, heavy AI spend

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 financiers began to reject frustrating Alphabet profits and 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 revenue development on Tuesday and allocating a higher-than-expected $75 billion financial investment for its AI buildout this year.

AI-related stocks showed signs of recovery after being rocked recently following the soaring appeal of an inexpensive Chinese expert system design established by startup DeepSeek. Nvidia, which signed up one of 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 need to spend more cash which ´ s what the AI story has actually 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 earnings – would fall about 7% from the previous quarter.

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

U.S. services sector activity all of a sudden slowed in January in the middle of cooling need, helping curb rate development, a report from the Institute for Supply Management revealed on Wednesday.

„There are some concerns that the Fed might need to alleviate quicker, that the economy is slowing, however that ´ s really positive news for the marketplaces because they ´ re trying to find 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 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, but flagged uncertainty around the effect of brand-new tariffs, migration, policies 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%, 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 utility stocks leading the gains while communication services tipped 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 firm beat quotes for fourth-quarter profit, assisted 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 talk to Chinese President Xi Jinping to attempt to pacify a brand-new trade war in between the nations.

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

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

Johnson Controls jumped 12.5% as the building services company named Joakim Weidemanis as ceo and raised its 2025 profit forecast.

Advancing concerns surpassed decliners by a 2.62-to-1 ratio on the New Exchange, opentx.cz and by a 1.88-to-1 ratio on the Nasdaq.

The S&P 500 posted 31 brand-new 52-week highs and 12 new lows while the Nasdaq Composite recorded 100 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, pl.velo.wiki Devika Syamnath, Maju Samuel and Nia Williams)