On a recent Wednesday, the U.S. stock market opened lower but eventually regained ground, with all three major indices closing in the greenThis positive shift comes as the waves created by the DeepSeek phenomenon and trade tensions begin to settle, leading investors to refocus their attention on corporate earnings reports and the potential for interest rate cuts from the Federal Reserve.

Data released by the Institute for Supply Management indicated that the ISM services index for January fell short of expectations, signaling a slight deceleration in the growth of the services sector, which is a critical pillar of the U.S. economyThis is viewed as a factor that could help curb rising prices.

Rob Haworth, a senior investment strategist at U.SBank Asset Management, pointed out that certain stocks associated with artificial intelligence are showing signs of recoveryDespite the considerable attention that DeepSeek has garnered, he emphasized that the demand for AI technologies will remain robustHe further noted that data falling below expectations may be favorable for the market, as investors anticipate further rate cuts from the Federal Reserve.

The next Federal Reserve meeting is scheduled for March, and according to the CME Group’s FedWatch Tool, only 16.5% of traders expect a cut to be announced at that time, with a majority forecasting a rate reduction in June instead.

Richmond Fed President Tom Barkin indicated that the Federal Reserve remains inclined towards additional rate cuts this year, though he stressed the need for a better understanding of the impacts stemming from new government policies in areas such as tariffs, immigration, and regulation.

Daniel Skelly, head of market research and strategy at Morgan Stanley Wealth Management, commented on the current market volatilityHe characterized this week with the term "volatility," noting that the stock market is striving to find its footing amid a constantly changing tariff environment and mixed corporate earnings reports

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The S&P 500, which just recently reached an all-time high less than two weeks ago, has indeed been in a state of fluctuation since early December.

Renowned short seller Jim Chanos expressed concern over the unpredictability of risks that the U.S. market might face in the next six to twelve monthsHe pointed out that such challenges will likely stem from unforeseen events, citing how recent concerns over DeepSeek resulted in a significant market dip, erasing approximately $1 trillion in U.S. stock market value.

In an interview on Wednesday, Chanos stated, "The real risk will come from something like DeepSeek; it can emerge suddenly and drastically alter public perception."

As the day drew to a close, the stock market reflected this complex landscapeThe Dow Jones Industrial Average finished up 317.24 points, or 0.71%, closing at 44,873.28. The Nasdaq Composite increased by 38.31 points, a modest rise of 0.19%, to end at 19,692.33. Meanwhile, the S&P 500 index gained 23.60 points or 0.39%, settling at 6,061.48.

Sector-wise, most major industry ETFs saw gains, with the biotech index ETF surging by 2.54% and semiconductor ETFs recording a rise of 2.35%. Other ETFs, including those tracking global tech stocks, technology sectors, banks, regional banks, financials, and utilities, grew by as much as 1.58%. However, the global airline industry ETF dipped by 0.73%, and the discretionary consumer ETF fell by 1.13%.

Among the 11 key sectors within the S&P 500, most posted gains, with real estate and utilities leading the chargeHealth care, financials, and information technology sectors recorded approximately 1% increases, while telecommunications suffered a decline of 2.79%, with consumer discretionary down by 1.59%.

The performances of prominent stocks were quite mixedMajor tech stocks showed a varied response: Nvidia experienced a robust surge of over 5%, reclaiming a market capitalization above the $3 trillion markThis uptick followed the announcement from a key partner, AMD, indicating that new AI data center systems powered by Nvidia's advanced Blackwell chips are ready for shipment.

Meanwhile, Netflix and Intel both saw gains exceeding 1%, with Microsoft and Meta slightly rising

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In contrast, Tesla dropped over 3%, Amazon fell by more than 2%, and Apple experienced a minor decline.

Google faced significant pressure, plummeting more than 7% as the company's cloud computing revenue and total revenues from the previous quarter failed to meet expectationsGoogle is projected to spend up to $75 billion in capital expenditures this fiscal year, primarily for expanding its AI offerings and bolstering its data centers.

Uber Technologies forecasted that its total orders for the current quarter would range between $42 billion and $43.5 billion, falling short of expectations, resulting in a substantial decline of 7.6% in its stock price.

In the realm of Chinese stocks traded in the U.S., the Nasdaq Golden Dragon China Index dropped by 2.26%. Notable declines included Futu Holdings, Baidu, and NIO, which each fell more than 4%, while Li Auto, Pinduoduo, JD.com, and Alibaba decreased by over 3%. XPeng Motors was also down more than 2%.

Turning to corporate news, Google has made headlines by updating several Gemini 2.0 models, signifying a comprehensive overhaul of its product lineThe tech giant officially ushered in the "Gemini 2.0" era, launching the Gemini 2.0 Flash model alongside the Gemini 2.0 Flash-Lite and Gemini 2.0 Pro variants.

Ford Motor Company reported an adjusted EPS of $0.39 for the fourth quarter, leading to a post-market decline of over 5%. The automotive giant posted revenues of $48.2 billion and is anticipated to achieve the highest revenue year in its history in 2024. While the fourth quarter showed an adjusted EPS surpassing analyst expectations, Ford’s revenue from its Model e segment was down 11% year-over-year.

Arm Holdings reported total revenue of $983 million for its third fiscal quarter, exceeding anticipated figuresHowever, after-hours trading saw a drop of over 6%. The company has high projections for the fourth quarter, estimating revenues between $1.18 billion and $1.28 billion.

Qualcomm exceeded expectations with adjusted revenue of $11.67 billion for its first quarter

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