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

Indexes: equipifieds.com Dow up 0.47%, S&P 500 up 0.19%, gdprhub.eu 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 financiers started to reject frustrating Alphabet revenues and weighed the possibility of future rate of interest cuts from the U.S. Federal Reserve.

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

AI-related stocks showed indications of recovery after being rocked last week following the soaring popularity of a low-cost Chinese expert system model developed by startup DeepSeek. Nvidia, which signed up among the most significant 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 have to spend more money which ´ s what the AI story has actually been. This is a fairly long cycle story," said Rob Haworth, senior investment strategist at U.S. Bank Asset Management.

Advanced Micro Devices, meanwhile, lost 8.2% after CEO Lisa Su said the business's current-quarter data center sales - a proxy for its AI revenue - would fall about 7% from the previous quarter.

On the information front, championsleage.review investors are expecting the January nonfarm payrolls report, expected to be launched on Friday.

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

"There are some concerns that the Fed may require to reduce much faster, that the economy is slowing, however that ´ s actually favorable news for the marketplaces because they ´ re searching for those Fed rate cuts," Haworth said.

The next Federal Open Markets Committee conference remains in March, and while just 16.5% of traders anticipate a rate cut then, tandme.co.uk 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, but flagged uncertainty around the effect of brand-new tariffs, cadizpedia.wikanda.es 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 higher, with real estate 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 getting ready for hb9lc.org a possible examination of the iPhone maker.

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

Markets likewise await advancements on the tariffs front after Trump said on Tuesday he remained in no rush to speak with Chinese President Xi Jinping to try 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 business movers, FMC Corp plunged 32% after the agrichemicals producer forecast first-quarter profits below quotes.

Johnson Controls jumped 12.5% as the structure options company called Joakim Weidemanis as chief executive officer and raised its 2025 revenue 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 posted 31 brand-new 52-week highs and 12 brand-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)

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