US Stocks Stage Rebound

Earnings Miss Hits Tech Giants

US stocks reversed early losses on Wednesday to close higher, led by gains in the Dow Jones Industrial Average. However, major tech companies Alphabet (GOOGL) and AMD (AMD) disappointed with their earnings results.

Alphabet Clouds Overcast

Alphabet's stock plunged nearly 8% after the company reported quarterly revenue below estimates. The cloud segment underperformed, casting doubt on the effectiveness of Google's AI investments.

AMD's AI Worries

AMD shares tumbled over 6% following a disappointing data-center sales forecast. The chipmaker's AI guidance also fell short, raising concerns about the company's growth prospects.

Big Tech Boost

Despite the tech earnings misses, the Nasdaq Composite still managed to rise 0.2%. This was largely due to a surge in Nvidia (NVDA) shares, which jumped over 5%.

Yields Drop, Interest-Sensitive Sectors Rally

The 10-year Treasury yield declined, boosting interest-sensitive sectors. Real Estate (XLRE) and Utilities (XLU) led the sector gains, rising by over 1%.

Fed Officials Reassure Amid Tariff Turmoil

Federal Reserve officials emphasized that they will not rush to change their monetary policy stance in response to President Trump's tariffs. They noted that they need to monitor the impact of the tariffs on inflation and economic growth.

Tariff Risks Loom

Tariffs imposed by President Trump are causing concerns in several industries. The housing sector, for example, could face higher costs, leading to a decline in affordability.

Big Tech Spending Spree

Meta (META), Microsoft (MSFT), and Alphabet plan to spend a combined $228 billion in capex in 2025, driven by investments in AI infrastructure. However, investors remain cautious about the potential return on these expenditures.

Disney's Streaming Surge

Disney (DIS) reported a profit in its streaming segment, offsetting losses in its parks business. The company also raised the prices of its streaming plans, resulting in a smaller-than-expected decline in Disney+ subscribers.

Apple Targeted by China

Apple (AAPL) became the latest tech giant to face antitrust scrutiny in China. The country's regulators are investigating the company's App store fees, further escalating tensions between the US and China.