US Stocks Rebound from Early Losses to End Higher

Key Highlights:

* US stocks recovered from initial losses on Wednesday to close higher, supported by gains in the tech sector.
* Earnings from Alphabet (GOOG) and AMD (AMD) disappointed, but Nvidia (NVDA) shares surged, boosting broader market sentiment.
* The Nasdaq Composite (IXIC) gained 0.2%, while the S&P 500 (GSPC) increased by 0.4%.
* The Dow Jones Industrial Average (DJI) led the rally, rising by 0.7%.

Alphabet's Cloud Disappoints, Nvidia Benefits

* Alphabet's stock plummeted nearly 8% after its quarterly cloud revenue fell short of expectations.
* Investors expressed concern over the company's hefty spending on AI, which may not yield the desired results in the immediate future.
* Nvidia appears to be a potential beneficiary of this spending, helping lead the major indexes' recovery with a more than 5% gain.

Tech Giants Increase Capital Expenditures

* Alphabet, Meta (META), and Microsoft (MSFT) are planning to spend a combined $230 billion on capital expenditures in 2025.
* This represents a 55% increase from 2024, driven by their investments in artificial intelligence infrastructure.
* Investors remain skeptical about the timeline for returns on these investments.

Trump Tariffs Impact Housing Affordability

* Proposed tariffs by President Trump could increase the cost of building and purchasing homes.
* Builders may pass on increased costs to buyers, potentially pricing out prospective homeowners.

Activity in Services Sector Slows

* Data from the Institute of Supply Management (ISM) indicated that activity in the US services sector expanded in January, but at a slower pace compared to previous months.
* Concerns about tariffs and their potential impact on demand may have contributed to this slowdown.