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FMC plunges on lower quarterly revenue forecast

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Alphabet falls after downbeat earnings, heavy AI spend

(Updates at the close)

By Abigail Summerville and Shashwat Chauhan

Feb 5 (Reuters) -

All three major stock indexes closed higher on Wednesday,

rebounding from declines earlier in the session as investors

brushed off disappointing Alphabet earnings and weighed the

prospect of future interest rate cuts from the U.S. Federal

Reserve.

Google-parent Alphabet dropped after posting

downbeat cloud revenue growth on Tuesday and earmarking a

higher-than-expected $75 billion investment for its AI buildout

this year.

Some 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, rose 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, fell after CEO

Lisa Su said the company's current-quarter data center sales - a

proxy for its AI revenue - would drop 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.

The S&P 500 gained 24.10 points, or 0.40%, to end at

6,061.98 points, while the Nasdaq Composite gained 40.91

points, or 0.21%, to 19,694.93. The Dow Jones Industrial Average

rose 317.79 points, or 0.71%, to 44,873.80.

Most of the S&P 500 sectors traded higher, with real estate

and utility stocks leading the gains while

communication services fell around 3%.

Shares of Apple ( AAPL ) slipped as Bloomberg News reported

that China's antitrust regulator was preparing for a possible

investigation of the iPhone maker.

Uber Technologies ( UBER ) dropped after the ride-hailing

company forecast current-quarter bookings below estimates.

Fiserv ( FI ) advanced 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 on Wednesday.

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

agrichemicals producer forecast first-quarter revenue below

estimates.

Johnson Controls ( JCI ) jumped as the building solutions

company named Joakim Weidemanis as chief executive officer and

lifted its 2025 profit forecast.