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FMC plunges 33% on lower quarterly revenue forecast

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Alphabet falls nearly 8% after downbeat earnings, heavy AI

spend

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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

Feb 5 (Reuters) -

The S&P 500 and the Dow rose on Wednesday, as investors

started to brush off disappointing Alphabet earnings and weighed

the prospect of future interest rate 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 recovery after being

rocked last week following the soaring popularity of a low-cost

Chinese artificial intelligence model developed by startup

DeepSeek. Nvidia ( NVDA ), which registered one of the biggest

losses, was up 3.3% on Wednesday.

"Ultimately, demand is not going away 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 investment strategist at U.S.

Bank Asset Management.

Advanced Micro Devices ( AMD ), meanwhile, 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, investors are looking ahead to the

January nonfarm payrolls report, expected to be released on

Friday.

U.S. services sector activity unexpectedly slowed in January

amid cooling demand, helping curb price growth, a report from

the Institute for Supply Management showed on Wednesday.

"There are some concerns that the Fed may need to ease

faster, that the economy is slowing, but that's actually

positive news for the markets because they're looking for those

Fed rate cuts," Haworth said.

The next Federal Open Markets Committee meeting is in

March, and while only 16.5% of traders expect a rate cut then, a

majority of traders anticipate 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, immigration,

regulations 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 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 fell over 3%.

Shares of Apple ( AAPL ) slipped 1.2% as Bloomberg News

reported that China's antitrust regulator was preparing for a

possible investigation of the iPhone maker.

Uber Technologies ( UBER ) dropped 7.2% after the

ride-hailing company forecast current-quarter bookings below

estimates.

Fiserv ( FI ) advanced 7.3% as the payments firm beat

estimates for fourth-quarter profit, helped by strong demand in

its banking and payments processing unit.

Markets also await developments on the tariffs front after

Trump said on Tuesday he was in no hurry to speak to Chinese

President Xi Jinping to try to defuse a new trade war between

the countries.

The Cboe Volatility Index, known as Wall Street's

fear gauge, dropped 6.3% to 16.1 today.

In corporate movers, FMC Corp ( FMC ) plunged 32% after the

agrichemicals producer forecast first-quarter revenue below

estimates.

Johnson Controls ( JCI ) jumped 12.5% as the building

solutions company named Joakim Weidemanis as chief executive

officer and lifted its 2025 profit forecast.

Advancing issues outnumbered 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 new 52-week highs and 12 new lows

while the Nasdaq Composite recorded 100 new highs and 85 new

lows.