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

Indexes: Dow up 0.47%, hb9lc.org 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 historydb.date the Dow increased on Wednesday, as investors started to reject disappointing Alphabet incomes and weighed the possibility of of interest cuts from the U.S. Federal Reserve.

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

AI-related stocks revealed signs of recovery after being rocked recently following the skyrocketing appeal of an affordable Chinese artificial 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 money which ´ 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, surgiteams.com on the other hand, lost 8.2% after CEO Lisa Su said the business's current-quarter data center sales - a proxy for its AI earnings - would fall about 7% from the previous quarter.

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

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

"There are some concerns that the Fed might need to reduce quicker, that the economy is slowing, but that ´ s in fact favorable news for the markets since they ´ re trying to find those Fed rate cuts," Haworth said.

The next Federal Open Markets Committee meeting remains in March, and while only 16.5% of traders anticipate a rate cut then, a majority 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, engel-und-waisen.de but flagged uncertainty around the effect of new tariffs, migration, regulations and disgaeawiki.info other initiatives 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 quotes for fourth-quarter earnings, helped by strong need in its banking and payments processing unit.

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 new trade war in 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 projection first-quarter income listed below estimates.

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

Advancing concerns 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 brand-new 52-week highs and 12 brand-new lows while the Nasdaq Composite taped 100 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 wiki.asexuality.org Nia Williams)