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Alphabet falls almost 8% after downbeat revenues, 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 reject frustrating Alphabet profits 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 investment for its AI buildout this year.

AI-related stocks revealed indications of recovery after being rocked recently following the skyrocketing popularity of an affordable Chinese synthetic intelligence model established by startup DeepSeek. Nvidia, which signed up one of the biggest losses, utahsyardsale.com was up 3.3% on Wednesday.

"Ultimately, need 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 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 company's current-quarter information center sales - a proxy for its AI earnings - would fall about 7% from the previous quarter.

On the information front, systemcheck-wiki.de financiers are expecting the January report, expected to be released on Friday.

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

"There are some concerns that the Fed may require to reduce quicker, that the economy is slowing, however that ´ s really positive news for the markets due to the fact that they ´ re searching for those Fed rate cuts," Haworth said.

The next Federal Open Markets Committee conference remains in March, and while only 16.5% of traders expect a rate cut then, a majority 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 impact of brand-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 increased 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%, junkerhq.net 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 preparing for a possible examination 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 system.

Markets also await advancements on the tariffs front after Trump said on Tuesday he remained in no rush to talk to Chinese President Xi Jinping to attempt to pacify a brand-new trade war between the nations.

The Cboe Volatility Index, known 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 profits listed below price quotes.

Johnson Controls jumped 12.5% as the building options business called Joakim Weidemanis as ceo and raised its 2025 profit projection.

Advancing issues surpassed decliners by a 2.62-to-1 ratio on the New York Stock Exchange, asteroidsathome.net and by a 1.88-to-1 ratio on the Nasdaq.

The S&P 500 published 31 brand-new 52-week highs and 12 new lows while the Nasdaq Composite taped 100 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)