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Alphabet falls almost 8% after downbeat revenues, 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 increased on Wednesday, akropolistravel.com as financiers started to brush off frustrating Alphabet revenues and weighed the prospect of future rates of interest cuts from the U.S. Federal Reserve.


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


AI-related stocks showed signs of healing after being rocked recently following the soaring appeal of a low-priced Chinese expert system design established by start-up DeepSeek. Nvidia, which registered 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 invest more cash and that ´ s what the AI story has been. This is a fairly long cycle story," said Rob Haworth, senior 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 information 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 demand, assisting curb rate development, a report from the Institute for Supply Management showed on Wednesday.


"There are some concerns that the Fed might need to alleviate faster, that the economy is slowing, but that ´ s in fact positive news for the marketplaces since they ´ re looking for those Fed rate cuts," Haworth said.


The next Federal Open Markets Committee conference remains in March, and while only 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 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 property and utility stocks leading the gains while interaction services tipped over 3%.


Shares of Apple slipped 1.2% as Bloomberg News reported that China's antitrust regulator was getting ready for a possible examination of the iPhone maker.


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


Markets also await advancements 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 nations.


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


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


Johnson Controls jumped 12.5% as the structure services company called Joakim Weidemanis as ceo and raised its 2025 profit forecast.


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 new lows while the Nasdaq Composite taped 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)