Dow, S&P 500, Nasdaq close higher as Nvidia pops, Google slides

The 10-year Treasury yield (^TNX

) fell nine basis points to hit 4.42%, its lowest level since December 2024 on Wednesday.

Interest-rate sensitive ares 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.

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.

Read the full story here.

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.”

Read more here.

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.

Read the full story here.

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.

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%.

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.

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.

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.

Read more here.

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.

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:

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.

Read more of Disney’s earnings results here.

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

USPS suspends inbound parcels from China, Hong Kong

Tech investors are aggressively buying the dip

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.

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:

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.