U.S. stocks closed higher on Wednesday as investors digested corporate earnings reports and the possibility of future interest rate cuts by the Federal Reserve. The Dow Jones Industrial Average rose 0.71%, the S&P 500 increased 0.39%, and the Nasdaq Composite added 0.19%. FMC Corporation plunged 33.5% after issuing a lower-than-expected quarterly revenue forecast.
Alphabet fell 7.3% following downbeat earnings and higher spending on artificial intelligence initiatives. The Federal Reserve lowered interest rates by a quarter of a point. Governor Andrew Bailey cited “heightened uncertainty” as a key factor in the decision.
Wall Street’s “fear gauge,” which measures market volatility, has been affected recently by factors such as tariffs, inflation worries, and questions surrounding AI spending. U.S. equities were mixed at midday, slowed by new Chinese tariffs on U.S. goods and weak tech results. Alphabet’s sales fell short of forecasts as the Google parent announced plans for significant artificial intelligence spending.
Advanced Micro Devices shares fell after the chipmaker posted weaker-than-expected data center revenue. Match Group shares declined following the company’s decision to remove its CEO and provide soft guidance, citing a drop in sales at its Tinder and other units. Concerns about a trade war with China pushed gold prices to record highs, lifting shares of Newmont and other gold miners.
Johnson Controls International shares soared as the building operations company exceeded earnings and revenue estimates, offering better-than-anticipated guidance. Its largest segment posted a 10% sales increase. GSK Plc saw its shares rise when the pharmaceutical firm increased its long-term outlook and initiated a $2.5 billion share buyback on optimism about its pipeline sales.
Oil futures declined, while the yield on the 10-year Treasury note tumbled. The U.S. dollar weakened against the euro, pound, and yen. Most major cryptocurrencies traded higher, although bitcoin suffered a slight dip.
Stocks rallied on Wednesday, pushing the major averages higher for the second day in a row, as investors looked past the trade turmoil that weighed on the market earlier in the week. The gains came even as notable technology stocks posted steep losses following earnings. Shares of Super Micro jumped more than 5% after the server maker announced the integration of its artificial intelligence data center with Nvidia’s Blackwell platform.
Stock market shows resilience
AMD helped the Dow’s advance, as its stock jumped 6% on better-than-expected adjusted earnings and revenue for the fourth quarter. The Dow, along with the two other major averages, tumbled on Monday after the U.S. unveiled a 10% levy on Chinese imports.
However, the benchmarks began to recover later during that trading day and continued the trend into Tuesday. “Overall, Third Point expects the environment for investing in equities to remain favorable, with periodic dislocations caused by the unconventional approach of this Administration in conveying and enacting policy that affects markets and the economy,” Dan Loeb said in a new investor letter on Tuesday. Apple ended the session marginally lower amid rumors that regulators in China were considering launching a formal investigation into the company’s App Store fees and policies.
Retail traders are breaking records despite the uncertainty surrounding the effect of tariffs on markets. According to JPMorgan, retail traders are now flooding into single stocks, diverging from trends in previous weeks when net inflows were dominated by broad-market ETFs. Most of the recent inflows have gone into megacap technology stocks, particularly Nvidia.
“Retail traders are on track to break all records. Within single stocks, they set records with a net imbalance of $3.2B on Tuesday,” analyst Emma Wu wrote in a Wednesday note to clients. Active fund managers had a strong start in 2025, according to Bank of America.
“63% of large cap funds beat their Russell benchmark, the best hit rate in one year. The average fund generated 50 basis points of alpha, snapping a four-month streak of underperformance,” equity and quant strategist Savita Subramanian said in a note to clients. Managers were generally overweight in communication services, which helped performance.
The benchmark 10-year Treasury yield fell 10 basis points to trade at 4.412% on Wednesday afternoon. The decline follows the Treasury Department’s announcement that auction sizes are expected to be steady while it issues “incremental” increases to Treasury Inflation-Protected Securities sizes. Tesla has had a rough start to February, falling 3.3% on Wednesday and now down more than 6% this week.
The stock appears to be caught up in worries about the trade war and how tariffs might affect automakers. Tesla also suffered in several key European markets and missed estimates on both the top and bottom lines in its recent earnings report. New 52-week highs are swamping new lows 26 to 10 in the S&P 500 in midday trading Wednesday.
Some of the companies reaching new highs include Live Nation, Meta, AutoZone, Hilton, and Starbucks. Overall, the stock market showed resilience as investors navigated through trade concerns and mixed earnings reports from major technology companies.
