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

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 as of mid afternoon)


By Abigail Summerville and Shashwat Chauhan


The S&P 500 and the Dow rose on Wednesday, as financiers started to brush off disappointing Alphabet profits 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 profits development on Tuesday and earmarking a higher-than-expected $75 billion investment for its AI buildout this year.


AI-related stocks revealed signs of healing after being rocked recently following the skyrocketing appeal of an inexpensive Chinese synthetic intelligence design developed by startup DeepSeek. Nvidia, which signed up among 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 money 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 information center sales - a proxy for its AI earnings - would fall about 7% from the previous quarter.


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


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


"There are some issues that the Fed might require to alleviate faster, that the economy is slowing, however that ´ s actually favorable news for the marketplaces due to the fact that they ´ re looking for 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 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, however flagged uncertainty around the effect of brand-new tariffs, migration, policies and iuridictum.pecina.cz other 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, biolink.palcurr.com 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 utility stocks leading the gains while communication 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 estimates for fourth-quarter earnings, helped 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 rush to speak with Chinese President Xi Jinping to try to defuse a new trade war between the countries.


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


In corporate movers, FMC Corp plunged 32% after the agrichemicals producer projection first-quarter earnings below estimates.


Johnson Controls jumped 12.5% as the structure services company called Joakim Weidemanis as president and raised its 2025 earnings projection.


Advancing issues outnumbered 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 new lows while the Nasdaq Composite recorded 100 brand-new highs and 85 brand-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)