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Alphabet falls nearly 8% after downbeat profits, e.bike.free.fr 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 increased on Wednesday, as investors began to brush off disappointing Alphabet earnings 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 development on Tuesday and earmarking a higher-than-expected $75 billion financial investment for its AI buildout this year.

AI-related stocks showed signs of healing after being rocked last week following the skyrocketing popularity of a low-priced Chinese expert system design developed by start-up DeepSeek. Nvidia, which signed up among the most significant losses, bbarlock.com 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 cash 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 business's current-quarter information - a proxy for its AI income - would fall about 7% from the previous quarter.

On the information front, financiers are looking ahead to the January nonfarm payrolls report, anticipated to be launched on Friday.

U.S. services sector activity unexpectedly slowed in January in the middle of cooling need, helping curb rate growth, a report from the Institute for Supply Management revealed on Wednesday.

"There are some concerns that the Fed may need to alleviate faster, that the economy is slowing, but that ´ s actually favorable news for the markets since 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, grandtribunal.org a bulk 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, however flagged uncertainty around the effect of new tariffs, immigration, regulations 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 utility stocks leading the gains while interaction 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 firm beat price quotes for fourth-quarter earnings, assisted by strong need 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 brand-new trade war in between the countries.

The Cboe Volatility Index, known as 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 profits listed below estimates.

Johnson Controls leapt 12.5% as the building services company called Joakim Weidemanis as president and raised its 2025 revenue projection.

Advancing issues 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 new 52-week highs and 12 new lows while the Nasdaq Composite recorded 100 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)