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%


(Updates since mid afternoon)


By Abigail Summerville and Shashwat Chauhan


The S&P 500 and the Dow increased on Wednesday, as investors started to reject frustrating Alphabet incomes and weighed the prospect of future rates of interest cuts from the U.S. Federal Reserve.


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


showed signs of recovery after being rocked last week following the soaring popularity of an inexpensive Chinese synthetic intelligence model established by startup DeepSeek. Nvidia, which registered among the greatest losses, was up 3.3% on Wednesday.


"Ultimately, demand is not going away for AI even with the DeepSeek news. They ´ re all going to need to invest more cash and that ´ s what the AI story has actually been. This is a fairly long cycle story," said Rob Haworth, senior akropolistravel.com 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 information center sales - a proxy for its AI profits - would fall about 7% from the previous quarter.


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


U.S. services sector activity unexpectedly slowed in January in the middle of cooling need, assisting curb price growth, a report from the Institute for Supply Management revealed on Wednesday.


"There are some issues that the Fed might require to relieve faster, that the economy is slowing, but that ´ s actually positive news for the marketplaces due to the fact that they ´ re searching for those Fed rate cuts," Haworth said.


The next Federal Open Markets Committee meeting remains in March, and while just 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, but flagged uncertainty around the impact 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 greater, with property 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 firm beat estimates for fourth-quarter revenue, assisted by strong demand in its banking and payments processing system.


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 pacify a new trade war between the countries.


The Cboe Volatility Index, called 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 profits below estimates.


Johnson Controls leapt 12.5% as the building solutions business named Joakim Weidemanis as primary executive officer and raised its 2025 earnings forecast.


Advancing issues surpassed 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 new lows while the Nasdaq Composite taped 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)