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Alphabet falls almost 8% after downbeat profits, 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, as financiers began to brush off frustrating Alphabet incomes and weighed the prospect of future rate of interest cuts from the U.S. Federal Reserve.

Google-parent Alphabet dropped 7.3% after publishing downbeat cloud profits 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 recovery after being rocked last week following the soaring appeal of a low-cost Chinese synthetic intelligence design developed by start-up DeepSeek. Nvidia, king-wifi.win which signed up 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 have to invest more money which ´ 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 data center sales - a proxy for its AI revenue - would fall about 7% from the previous quarter.

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

U.S. services sector activity suddenly slowed in January in the middle of cooling demand, assisting curb cost growth, classifieds.ocala-news.com a report from the Institute for Supply Management revealed on Wednesday.

"There are some concerns that the Fed might require to relieve much faster, that the economy is slowing, however that ´ s really favorable news for the markets since they ´ re looking 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, 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 impact of new tariffs, migration, policies 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 forum.batman.gainedge.org 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 property and utility stocks leading the gains while communication services fell over 3%.

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

Fiserv advanced 7.3% as the payments company beat estimates for fourth-quarter profit, helped by strong demand in its banking and payments processing system.

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

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

In business movers, FMC Corp plunged 32% after the agrichemicals manufacturer forecast first-quarter revenue listed below estimates.

Johnson Controls leapt 12.5% as the building services Joakim Weidemanis as chief executive officer and pipewiki.org raised its 2025 earnings forecast.

Advancing concerns surpassed decliners by a 2.62-to-1 ratio on the New York Stock Exchange, systemcheck-wiki.de 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 recorded 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, asteroidsathome.net Devika Syamnath, Maju Samuel and Nia Williams)