Alphabet falls almost 8% after downbeat incomes, dokuwiki.stream heavy AI invest

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

(Updates as of mid afternoon)

By Abigail Summerville and Shashwat Chauhan

The S&P 500 and the Dow increased on Wednesday, as financiers started to reject frustrating Alphabet incomes and weighed the prospect of future interest rate 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 investment for its AI buildout this year.

AI-related stocks showed signs of recovery after being rocked last week following the skyrocketing appeal of a low-priced Chinese synthetic intelligence model established by start-up DeepSeek. Nvidia, which registered one of 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 spend more money 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 company's current-quarter data center sales - a proxy for its AI income - 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 released on Friday.

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

"There are some concerns that the Fed may need to relieve quicker, that the economy is slowing, however that ´ s in fact 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 expect 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 new tariffs, immigration, guidelines and other initiatives 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 higher, with realty and energy stocks leading the gains while interaction services tipped over 3%.

Shares of Apple slipped 1.2% as Bloomberg News reported that China's antitrust regulator was preparing for a possible investigation of the iPhone maker.

Fiserv advanced 7.3% as the payments company beat price quotes for profit, helped by strong demand in its banking and payments processing unit.

Markets also await advancements on the tariffs front after Trump said on Tuesday he remained in no rush to speak to Chinese President Xi Jinping to attempt to defuse a brand-new trade war in between the countries.

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

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

Johnson Controls leapt 12.5% as the structure solutions company called Joakim Weidemanis as primary executive officer and raised its 2025 revenue forecast.

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 new 52-week highs and 12 new lows while the Nasdaq Composite recorded 100 new highs and 85 new lows.

(Reporting by Abigail Summerville in New York, Shashwat Chauhan and Sukriti Gupta in Bengaluru; Editing by Pooja Desai, Devika Syamnath, Maju Samuel and Nia Williams)