Alphabet falls nearly 8% after downbeat revenues, 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 investors began to reject frustrating Alphabet profits and weighed the possibility of future rates of interest cuts from the U.S. Federal Reserve.

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

AI-related stocks revealed indications of healing after being rocked last week following the soaring appeal of an inexpensive Chinese expert system model established by startup DeepSeek. Nvidia, which registered one of the most significant losses, was up 3.3% on Wednesday.

"Ultimately, demand is not disappearing for AI even with the DeepSeek news. They ´ re all going to have to invest more money and that ´ 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, meanwhile, lost 8.2% after CEO Lisa Su said the company'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, anticipated to be launched on Friday.

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

"There are some concerns that the Fed might require to ease quicker, that the economy is slowing, but that ´ s in fact favorable news for the markets because they ´ re looking for those Fed rate cuts," Haworth said.

The next Federal Open Markets Committee meeting remains in March, and users.atw.hu while only 16.5% of traders anticipate a rate cut then, a majority of traders prepare for shiapedia.1god.org 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 new tariffs, migration, 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 genuine estate and energy 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 hb9lc.org a possible investigation of the iPhone maker.

Fiserv advanced 7.3% as the payments firm beat price quotes for fourth-quarter earnings, helped 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 hurry to speak with Chinese President Xi Jinping to try to pacify a brand-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 earnings listed below quotes.

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

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 new lows while the Nasdaq Composite recorded 100 brand-new highs and 85 brand-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 galgbtqhistoryproject.org Nia Williams)