Investing.com--The S&P 500 rose slightly Wednesday, as falling Treasury yields on soft economic data helped stocks shrug off a slide in Alphabet.
At 12:54 p.m. ET (17:54 GMT), the Dow Jones Industrial Average rose 140 points, or 0.3%, the S&P 500 index rose 0.1% 0.3%, and the NASDAQ Composite was trading around the flatine.
Treasury yields dip on softer services activity
The ISM Services PMI fell to 52.8 in January from 54.0 in December, missing expectations for a reading for 54.0.
The softer services activity data helped pushed Treasury yields lower, boosting interest-rate sensitive corners of the market such as tech stocks.
On the labor market front, meanwhile, private employers in the US hired more workers than anticipated in January, according to data released earlier Wednesday, in a sign of stability in labor demand at the start of 2025.
Private payrolls increased by 183,000 during the month, according to data from payrolls processor ADP (NASDAQ:ADP), above the expected 148,000 growth.
The numbers serve, along with a raft of other labor market data this week, to help paint a picture of the US labor market in the early days of the first quarter, ahead of Friday’s widely-watched nonfarm payrolls report.
Data released on Tuesday showed that US job openings in December decreased by more than anticipated, although hiring remained resilient.
Alphabet slides as Q4 earnings underwhelm
Alphabet (NASDAQ:GOOGL) fell more than 7% after its fourth-quarter revenue missed expectations and slowing growth in its cloud division, which is closely tied to AI. The tech giant is also set to ramp up investment spending by more than analysts had expected, which is likely to weigh on free cash flow.
The search giant said it plans to spend $75 billion on building out its artificial intelligence capabilities this year, well above the $58 billion in capital expenditures pencilled in by analysts.
Still, some on Wall Street continue to back the tech giant, citing a rapidly growing AI market.
"GOOGL [Alphabet] remains at the forefront of the AI race, which is likely to expand the TAM for Search and Cloud, fuel growth higher for longer and drive shareholder value," Truist Securities said in a note.
Apple (NASDAQ:AAPL) stock also fell over 1% after Bloomberg reported that Chinese regulators are considering whether to open a formal probe into the iPhone giant’s App Store fees and policies.
Beijing could move against Apple
Beijing’s potential move against the iPhone giant could be seen as past a brewing trade war with China, after Trump’s 10% tariffs against the country took effect. Beijing retaliated with its own import tariffs and export controls, and also launched an antitrust investigation into Google.
Trump signaled that he was in no hurry to negotiate with Chinese President Xi Jinping, with the tariffs now set to remain in place for the foreseeable future.
Analysts warned that increased trade tariffs - which will be borne by US importers, could underpin inflation and pressure growth.
Earnings season continues
There are more major earnings to digest Wednesday.
Walt Disney (NYSE:DIS) stock fell more than 1% after the entertainment company reported a loss of subscribers at its Disney+ streaming service, even as it posted better-than-anticipated first-quarter earnings, bolstered in large part by returns during the holiday period from its animated film "Moana 2".
Uber Technologies (NYSE:UBER) stock fell almost 7% after the ride-hailing and food delivery giant forecast current-quarter bookings below estimates, joining a slew of US companies in warning that a strong dollar could hurt the first three months of 2025.
Advanced Micro Devices (NASDAQ:AMD) shares slumped almost 7% after its fourth-quarter data center revenue came in at $3.9 billion, below consensus expectations of $4.15 billion.
Chipotle Mexican Grill (NYSE:CMG) stock fell over 2% after the burrito chain reported fourth-quarter same-store sales that rose less than expected.
Markets have been bolstered by mostly solid quarterly corporate returns, with more than three-fourths of the 211 firms in the S&P 500 that have reported so far unveiling better-than-anticipated results.
(Peter Nurse, Ambar Warrick contributed to this article.)