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

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 investors began to brush off disappointing Alphabet earnings and weighed the possibility of future rate of interest cuts from the U.S. Federal Reserve.

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

AI-related stocks showed signs of recovery after being rocked recently following the skyrocketing popularity of a low-cost Chinese expert system model established by startup DeepSeek. Nvidia, which signed up among the greatest 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 spend 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, on the other hand, users.atw.hu lost 8.2% after CEO Lisa Su said the business's current-quarter data center sales - a proxy for townshipmarket.co.za its AI revenue - would fall about 7% from the previous quarter.

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

U.S. services sector activity suddenly slowed in January amid cooling need, helping curb price growth, allmy.bio a report from the Institute for Supply Management revealed on Wednesday.

"There are some concerns that the Fed might require to ease much faster, that the economy is slowing, however that ´ s in fact positive news for the markets 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 only 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, wino.org.pl however flagged uncertainty around the effect of brand-new tariffs, migration, regulations and other initiatives from U.S. President Donald Trump's administration.

At 2:00 p.m. ET (1900 GMT), the Dow Jones 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%, engel-und-waisen.de to 19,641.11.

Nine of the 11 S&P 500 sectors traded greater, with realty and utility stocks leading the gains while communication services tipped 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 profit, assisted by strong need in its banking and payments processing system.

Markets likewise await advancements on the tariffs front after Trump said on Tuesday he remained in no hurry to speak to Chinese President Xi Jinping to attempt to pacify a new trade war between the nations.

The Cboe Volatility Index, called Wall Street's worry gauge, dropped 6.3% to 16.1 today.

In corporate movers, FMC Corp plunged 32% after the agrichemicals producer projection first-quarter revenue listed below price quotes.

Johnson Controls leapt 12.5% as the building services business called Joakim Weidemanis as primary executive officer and raised its 2025 revenue projection.

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 brand-new lows while the Nasdaq Composite tape-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 wakewiki.de Nia Williams)