Alphabet falls almost 8% after downbeat earnings, 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 financiers began to brush off frustrating Alphabet revenues and weighed the possibility of future rates of interest cuts from the U.S. Federal Reserve.

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

AI-related stocks showed indications of healing after being rocked last week following the soaring popularity of a low-priced Chinese artificial intelligence design developed by startup DeepSeek. Nvidia, which signed up among the greatest 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 have 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 investment strategist at U.S. Bank Asset Management.

Advanced Micro Devices, meanwhile, lost 8.2% after CEO Lisa Su said the company's current-quarter data center sales - a proxy for its AI profits - would fall about 7% from the previous quarter.

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

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

"There are some concerns that the Fed may require to ease much faster, that the economy is slowing, however that ´ s in fact favorable news for the markets because they ´ re trying to find those Fed rate cuts," Haworth said.

The next Federal Open Markets Committee meeting remains in March, asteroidsathome.net and while only 16.5% of traders anticipate a rate cut then, a majority of traders prepare for a cut in June, it-viking.ch according to CME's FedWatch Tool.

Richmond Fed president Thomas Barkin said the Fed was still leaning towards more rate cuts this year, passfun.awardspace.us however flagged uncertainty around the impact of brand-new tariffs, immigration, policies and other initiatives from U.S. President Donald Trump's administration.

At 2:00 p.m. ET (1900 GMT), forum.pinoo.com.tr 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 it-viking.ch 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, botdb.win with real 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 price quotes for fourth-quarter profit, assisted by strong demand in its banking and payments processing unit.

Markets also await developments on the tariffs front after Trump said on Tuesday he remained in no rush to speak with Chinese President Xi Jinping to attempt to pacify a new trade war between the nations.

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

In business movers, FMC Corp plunged 32% after the agrichemicals manufacturer projection first-quarter revenue below estimates.

Johnson Controls leapt 12.5% as the building options business called Joakim Weidemanis as president and disgaeawiki.info raised its 2025 profit projection.

Advancing problems 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 published 31 brand-new 52-week highs and 12 new lows while the Nasdaq Composite tape-recorded 100 brand-new highs and 85 brand-new lows.

( by Abigail Summerville in New York City, Shashwat Chauhan and Sukriti Gupta in Bengaluru