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

Indexes: hikvisiondb.webcam 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 increased on Wednesday, cadizpedia.wikanda.es as investors started to brush off frustrating Alphabet profits and weighed the possibility of future interest rate cuts from the U.S. Federal Reserve.

Google-parent Alphabet dropped 7.3% after publishing downbeat cloud revenue growth on Tuesday and allocating a higher-than-expected $75 billion financial 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 design developed by start-up DeepSeek. Nvidia, which registered among the most significant 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 cash 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, 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 profits - would fall about 7% from the previous quarter.

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

U.S. services sector activity unexpectedly slowed in January in the middle of cooling demand, assisting curb price development, a report from the for Supply Management showed on Wednesday.

"There are some concerns that the Fed might require to relieve faster, that the economy is slowing, but that ´ s really positive news for the marketplaces due to the fact that they ´ re searching for 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 bulk of traders anticipate 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, guidelines and other efforts 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 greater, with realty 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 getting ready for a possible investigation of the iPhone maker.

Fiserv advanced 7.3% as the payments company beat quotes for fourth-quarter earnings, assisted by strong need in its banking and payments processing unit.

Markets likewise 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 defuse a brand-new trade war in between the countries.

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

In business movers, FMC Corp plunged 32% after the agrichemicals producer forecast first-quarter earnings below quotes.

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

Advancing concerns 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 published 31 new 52-week highs and 12 new lows while the Nasdaq Composite tape-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 Nia Williams)