US stocks recovered from losses on Wednesday to close higher on the day. Earnings from Alphabet (GOOG, GOOGL) and AMD (AMD) fell short, but Big Tech got a boost from a jump in Nvidia (NVDA) shares.
The tech-heavy Nasdaq Composite (^IXIC) rose 0.2%, while the benchmark S&P 500 (^GSPC) added 0.4%. The Dow Jones Industrial Average (^DJI) led the gains, rising 0.7%, or more than 300 points.
Alphabet’s stock was under pressure, down nearly 7%, after fourth quarter cloud revenue undershot estimates. The miss rattled investors concerned that the Google parent’s hefty spending on AI won’t see the hoped-for payoff any time soon.
Nvidia appears to be one potential beneficiary from that spending, however. It helped lead the major indexes’ charge back from the red, rising more than 5%.
Meanwhile, the 10-year Treasury yield (^TNX) fell nine basis points to hit 4.42%, its lowest level since December 2024.
AMD’s earnings provided another salvo in mixed sentiments around the AI trade. While the chipmaker posted a quarterly revenue beat, a disappointing data-center sales forecast raised worries about a loss of AI momentum. AMD shares tumbled over 6%.
Big Tech names like Alphabet are also getting caught up in the tariff tit-for-tat between the US and China, which Wall Street sees as a risk for tech and chip names alike. Apple (AAPL) shares dropped about 2% before recovering after a Bloomberg report that Beijing is looking into targeting its app store in an antitrust probe.
President Donald Trump’s tariff plans have markets already jumpy, and his unexpected suggestion late Tuesday that the US could take over the Gaza strip and develop it as a “Riviera of the Middle East” left investors even more bemused about which direction policy will take next.
LIVE COVERAGE IS OVER 22 updates
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Ford beats on Q4 results but issues muted 2025 guidance
Yahoo Finance’s Pras Subramanian reports:
Ford (F) reported a fourth quarter earnings and revenue beat, with full-year profit coming in slightly higher than expected, but the company issued muted full-year guidance. The results come after rival GM (GM) reported strong results but declined to return more cash to shareholders.
Ford said it sees full-year 2025 adjusted EBIT of $7.0 billion to $8.5 billion, and $3.5 billion to $4.5 billion in adjusted free cash flow. Ford said the guidance “presumes headwinds related to market factors,” such as pricing, though that does not include changes in policy like the potential loss of EV tax credits or tariffs. CFO Sherry House added in a call with reporters that a 25% tariff on imports “would have a major impact on our industry.”
Shares were down nearly 5% after hours following the release. Read more here.
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Interest rate sensitive sectors lead as yields fall
The 10-year Treasury yield (^TNX) fell 9 basis points to hit 4.42%, its lowest level since December 2024, on Wednesday.
interest rate sensitive areas of the market rallied in reaction. Real Estate (XLRE) led the sector action on Wednesday, rising nearly 1.6%, while the small-cap Russell 2000 index (^RUT), which had come under pressure as bond yields rose, added nearly 1% on the day.
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MicroStrategy rebrands as Strategy
MicroStrategy (MSTR) announced a splashy rebrand Wednesday that underscored its commitment to its cryptocurrency strategy.
The company said it will now do business under the name Strategy and changed its logo to a bitcoin symbol. In its announcement, Strategy said it is “the world’s first and largest Bitcoin Treasury Company.”
Shares of the company were down about 2% on Wednesday and were little changed after the midday announcement. Year to date, the stock is up 17% against bitcoin’s more modest 1% gain.
Once a small software firm, MicroStrategy is now the world’s largest bitcoin holding company, and its spending spree on the cryptocurrency has seen the stock outperform bitcoin handily over the last five years.
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Fed officials say they won’t be rushed amid the Trump tariff turmoil
Yahoo Finance’s Jennifer Schonberger reports:
Federal Reserve officials appear to have a unified message this week on the question of how they are reacting to President Donald Trump’s new tariffs.
Fed vice chair Philip Jefferson said, “I do not think we need to be in a hurry to change our stance.” San Francisco Fed president Mary Daly said, “We don’t need to be preemptive.” Richmond Fed president said Wednesday that “you want to wait and see.”
Chicago Fed president Austan Goolsbee said Wednesday that if inflation remains persistent the question for the Fed will become whether those price pressures are from new tariffs or increased demand.
“If we see inflation rising or progress stalling in 2025, the Fed will be in the difficult position of trying to figure out if the inflation is coming from overheating or if it’s coming from tariffs,” Goolsbee said in a speech Wednesday in Detroit.
“That distinction will be critical for deciding when or even if the Fed should act.”
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Alphabet, Meta, Microsoft set to spend $230 billion in 2025
Meta (META), Microsoft (MSFT), and Google parent Alphabet (GOOG) are expecting a cumulative $228 billion in capital expenditures in 2025, driven by their investments in artificial intelligence infrastructure. That’s a 55% increase from the roughly $150 billion those companies reported spending in 2024.
Tech giants contend all this spending will pay off in the long run. Investors aren’t so sure. Uncertainty surrounding the timeline for the payoff — along with ongoing debates about whether such high levels of spending are truly justified — continues to fuel concerns with each earnings cycle.
The companies’ higher-than-expected capital expenditures for the upcoming year come just as investors are scrutinizing Big Tech’s hefty artificial intelligence spending.
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Trump’s tariffs carry high stakes for housing affordability
Tariffs promised by President Trump could make it more expensive to buy a home if implemented.
In the past week, Trump has imposed and then delayed tariffs that experts say would drive up homebuilding costs, a burden that builders could pass on to buyers.
Data from Wolfe Research suggests that if builders can pass along those increased construction costs and raise the price of a new home by $10,000, the monthly housing payment will go up by $48 from $2,470 to $2,518, assuming a 6% mortgage rate buydown.
This would come as affordability concerns are holding many buyers back. According to data from Freddie Mac, the average 30-year mortgage rate was 6.95% last week.
“Indirectly, tariffs are clearly inflationary and imply a higher for longer mortgage rate environment, which is the greatest current demand headwind,” Trevor Allinson, director of equity research at Wolfe Research, wrote in a note to clients.
To this point, the National Association of Home Builders estimates that a mortgage rate increase from 6.0% to 6.25% would raise the monthly payment by $76, pricing out about 1.1 million buyers.
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S&P 500 turns positive
After falling at the open, stocks have rebounded throughout the day.
The tech-heavy Nasdaq Composite (^IXIC) slipped just below the flat line, while the benchmark S&P 500 (^GSPC) rose about 0.1%. The Dow Jones Industrial Average (^DJI) was up 0.3%.
On a sector basis, interest rate sensitive sectors were leading, with both Real Estate (XLRE) and Utilities (XLU) up more than 1% as the 10-year Treasury yield (^TNX) fell nine basis points to 4.43%.
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Activity in services sector ‘lost momentum’ to start 2025
Activity in the US services sector continued to expand in January, but at a slower pace than in prior months, according to Institute of Supply Management data.
The ISM’s services index came in at 52.8 for the month, down from December’s reading of 54.1 and below economists’ expectations of 54. Readings above 50 suggest comparative growth in activity, while those below 50 indicate contraction.
“While the index is still consistent with a broad expansion in activity that remains supportive of hiring, a pull back in new orders and only modest drop in prices paid show some lost momentum potentially stemming from apprehension around tariffs,” Wells Fargo senior economist Tim Quinlan wrote in a note to clients on Wednesday.
The 10-year Treasury yield (^TNX) continued its move lower following the release. At last check, the benchmark sat at 4.43%, down about nine basis points on the day.
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Nvidia pops more than 3% as Big Tech spending boom rolls on
Last week, the emergence of a new AI model from China’s DeepSeek sparked investor concern that the AI spending boom may cool off as companies find cheaper ways to fulfill their AI goals.
This spawned a massive sell-off in Nvidia’s (NVDA) stock, with the prevailing thought being that companies may not allocate as much spend to Nvidia’s expensive AI chips. But as Big Tech earnings have rolled on, few signs have emerged of a spending slowdown.
The most recent example came on Tuesday night, with Alphabet (GOOGL GOOG) saying it plans to lay out $75 billion in capital expenditure in 2025. That’s above Wall Street analysts’ estimates of $57.9 billion.
Fundstrat head of research Tom Lee pointed out that Alphabet’s increase is “a reminder that capex plans for AI and data center spending remain strong, even if one thinks DeepSeek represents a threat to those figures.”
To Lee’s point, shares of Nvidia, a supplier of AI chips to Alphabet, were up more than 3% in early trade on Wednesday.
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Alphabet shares fall nearly 8% as cloud disappoints
Alphabet’s (GOOGL,GOOG) stock is down more than 8% after the Google parent reported quarterly results.
Yahoo Finance’s Dan Howley reports:
The company fell short on its important cloud segment revenue. The company also dramatically expanded its capital expenditures for the year ahead, from $57.9 billion to a planned $75 billion.
Alphabet’s update comes as China said it’s launching an antitrust probe into Google, in what’s widely seen as a retaliatory measure by Beijing against President Trump’s 10% tariff on goods made in China.
Alphabet is also contending with the fallout from China-based DeepSeek’s AI models. News of these rocked the tech world last week, amid claims they were cheaper to train and as capable as leading models from Silicon Valley companies.
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Nasdaq lags at the open
US stocks pulled back on Wednesday after earnings from Alphabet (GOOG, GOOGL) and AMD (AMD) fell short, with investors on alert for fresh moves in the brewing US-China trade war.
The tech-heavy Nasdaq Composite (^IXIC) slipped 0.6%, while the benchmark S&P 500 (^GSPC) slid roughly 0.2%. The Dow Jones Industrial Average (^DJI) was roughly flat after the major gauges closed with gains on Tuesday.
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Disney CFO chat takeaway
I just wrapped a chat with Disney (DIS) CFO Hugh Johnston (airing live this morning on Yahoo Finance) and found these two points of most interest:
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Europe stocks tread water
European stocks trod water as uncertainty over the US-China tariff face-off continued to dog markets and while investors absorbed corporate results from Santander (SAN) and elsewhere.
The pan-regional benchmark Stoxx 600 (^STOXX) index swung between small gains and losses.
Meanwhile, Germany’s DAX (^GDAXI) was little changed, while the CAC (^FCHI) in Paris slipped 0.3% into the red. In London, the benchmark (^FTSE) index traded broadly flat.
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Disney earnings beat as streaming swings to profit, parks take a hit
Disney (DIS) reported first quarter earnings on Wednesday that beat expectations. The media and entertainment giant reported a profit in its streaming segment, while its parks business faced setbacks in the midst of two back-to-back hurricanes and greater cruise ship investments.
Disney+ subscribers also fell by 700,000 in the quarter as a result of expected user churn amid recent price increases. The company hiked the price of its various subscription plans in mid-October.
Analysts polled by Bloomberg had expected subscribers to decline by 1.41 million. The company had reported a loss of 600,000 Disney+ subscribers in the year-ago period. For the current quarter, the company said it expects another “modest decline” in Disney+ subscribers compared to Q1.
Shares ticked up about 2% in premarket trading following the results.
Revenue of $24.70 billion beat expectations of $24.57 billion in the quarter and represented a 5% increase from the prior-year period.
Adjusted earnings per share of $1.76 came in ahead of the $1.42 analysts polled by Bloomberg had expected. Earnings increased 44% from a year ago.
For the full year 2025, Disney reaffirmed guidance of high-single-digit earnings per share growth compared to fiscal 2024. Estimates are calling for an 8.1% increase year over year.
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Apple slides after report of China probe
Apple (AAPL) looks set to become the latest tech megacap to get embroiled in the tariff tug-of-war, as it drew the glare of China’s antitrust watchdog.
The regulator is laying the groundwork for a potential investigation into Apple’s policies and App store fees, Bloomberg reported. Shares fell over 2.5% before the bell.
Beijing has just revived anti-monopoly probes into Google and chip giant Nvidia (NVDA), and its authorities are exploring a new investigation against Intel (INTC), per the Financial Times.
The rush of competition scrutiny is seen as part and parcel of China’s retaliation to tariffs imposed on its exports by the Trump administration, as it could provide leverage in trade talks.
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Good morning. Here’s what’s happening today.
Economic data: MBA mortgage applications (week ending Jan. 31); ADP Private Payrolls (December); S&P Global US services PMI (January final); S&P Global US composite PMI (January final); ISM services index (January final)
Earnings: Disney (DIS), Aflac (AFL), Arm Holdings (ARM), Aurora Cannabis (ACB), Boston Scientific (BSX), Ford (F), Novo Nordisk (NVO), Qualcomm (QCOM), Toyota (TM), Uber (UBER), Viking Therapeutics (VKTX)
Here are some of the biggest stories you may have missed overnight and early this morning:
Alphabet’s slumping cloud sales spook investors
Morgan Stanley lowers Fed rate-cut forecast amid Trump tariffs
AMD shares sink as AI fears eclipse Q4 earnings beat
Trump’s tariffs fail to derail Wall Street’s bullish outlook
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Goldman returns with another tariff call
Goldman’s chief economist Jan Hatzius came out this morning with his latest call on tariffs. Notably, he expects 10% China tariffs to be just the starting point.
Stay on top of the latest updates on tariff threats and policy here.
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AMD shares get short-circuited
Nothing terribly wrong with AMD’s (AMD) quarter.
Good data center sales growth of 69% year over year was the standout.
But the stock is being hit in premarket — likely for two reasons. First, said data center growth missed estimates, and second, the company didn’t provide enough AI guidance for Wall Street.
Here’s what KeyBanc analyst John Vinh called out this morning:
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Chipotle gets roasted premarket
Chipotle’s (CMG) stock is getting roasted premarket, down 7%.
The company’s earnings had a few things the Street didn’t like from this high-multiple name. Sales guidance was soft, the quarterly sales result was soft, and margin commentary was mixed. January sales were off to a slow start too.
“We were disappointed in the comparable sales outlook but believe it could prove conservative, given the upcoming initiatives. Regardless, we reduced our 2025 operating profit estimate by less than 1% (margin better than expected), and we believe the current stock price offers an attractive entry point,” Stifel’s Chris O’Cull said in a note this morning.
O’Cull isn’t alone on the Street in defending the stock today.
I’ll have more insight into the story around 9:40 a.m. ET — Chipotle CFO Adam Rymer will be on Yahoo Finance for a video interview.
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Toyota Motor raises full-year operating profit forecast
Toyota (TM) raised its full-year operating profit forecast by 9%, signaling confidence in its ability to weather any potential US tariffs.
The world’s top-selling automaker updated its profit projection for the fiscal year ending March 2025 to 4.7 trillion yen ($30.7 billion), up from the previous forecast of 4.3 trillion yen.
In addition, Toyota announced plans to set up a wholly owned subsidiary in Shanghai to develop and produce electric vehicles and batteries for its Lexus brand. Production is expected to begin in 2027. The new unit will focus on creating a new Lexus EV with an initial annual production capacity of around 100,000 units.
Despite posting weaker-than-expected third quarter results and marking its second consecutive quarterly profit decline, Toyota’s confidence in its future performance remains strong.
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Gold sets record high as trade war between US and China pushes need for stable assets
Gold (GC=F) has surged to a record high, climbing nearly 1% as the first shots of the US-China trade war increase demand for haven assets.
The price of bullion hit an all-time high, topping $2,854 an ounce on Wednesday. This spike followed President Donald Trump’s move to impose a 10% tariff on Chinese imports.
China’s retaliatory efforts have been less aggressive compared to earlier trade conflicts when tariffs were nearly on par with the US’s. However, concerns remain about the potential impact on the world’s two largest economies. Markets are also closely watching to see if these renewed tariffs could trigger inflationary pressures, which might influence US monetary policy.
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Asian stocks drop as investors react to rising trade tensions
Asian stocks were mostly lower Wednesday as markets digested the impact of the trade tensions brewing between China and the US.
The CSI 300 Index (000300.SS) quickly erased its initial gains on the first trading day after the Lunar New Year holiday closure, falling by 0.6%.
Japan’s benchmark Nikkei 225 (^N225) slipped 0.2% in early trading. Australia’s ASX 200 (^AXJO) rose 0.5%, while Hong Kong’s Hang Seng (^HSI) dropped 0.6%. South Korea’s Kospi (^KS11) jumped 1.1%
What started as a relatively calm day quickly became volatile after news broke that the US Postal Service would temporarily halt inbound parcels from China and Hong Kong. This move came just one day after both the US and China imposed tariffs on each other’s exports. Although there are still hopes for a deal to ease tensions, investors are pulling back as uncertainty lingers.
The stock outlook remains unclear, largely dependent on further developments in tariff negotiations and China’s economic recovery. US President Donald Trump stated there is no urgency to speak with Chinese President Xi Jinping.