On Wednesday, all three big stock indexes – the Dow Jones, S&P 500, and Nasdaq – went up after earlier drops. Investors were not too worried about Alphabet’s disappointing earnings and were hopeful that the U.S. Federal Reserve might cut interest rates soon. Alphabet, the parent company of Google, saw its shares drop by 7.3% after it reported lower cloud revenue and announced a hefty $75 billion investment in artificial intelligence (AI) this year.
Despite Alphabet’s troubles, some AI stocks bounced back. Nvidia, which had a tough week, gained 5.4% on Wednesday. Broadcom also went up by 4.3%. Rob Haworth from U.S. Bank Asset Management noted that people still want AI solutions, and companies will need to keep spending money on it.
However, Advanced Micro Devices (AMD) shares fell 6.3% after the company’s CEO said that sales in their data center, which relate to their AI business, would likely drop. Investors are eagerly waiting for the January jobs report to be released on Friday and noticed a slowdown in the U.S. services sector, which might hint that the Federal Reserve could ease up on interest rates soon.
The Dow gained 317.24 points (0.71%), closing at 44,873.28. The S&P 500 went up 23.60 points (0.39%) to finish at 6,061.48, while the Nasdaq rose by 38.32 points (0.19%) to 19,692.33. Most sectors of the S&P 500 did well, with real estate leading the way, while communication services stumbled. Apple’s stock fell by 0.1% after there were reports of a possible investigation in China.
Uber Technologies saw its shares drop by 7.6% after predicting lower-than-expected bookings. On the other hand, Fiserv’s stock rose by 7.1% after its profits beat expectations thanks to strong demand.
Overall, positive market signals included a drop in the Cboe Volatility Index, also known as Wall Street’s fear gauge, which fell by 7.9%. FMC Corp shares plunged 33.5% due to poor revenue forecasts, while Johnson Controls jumped 11.3% after naming a new CEO and raising profit forecasts. Many more stocks went up than down, with advancing stocks outnumbering decliners on both the New York Stock Exchange and Nasdaq
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