New York Stock Market: Alphabet's Disappointing Results, Yet Market Rebounds with Dow Up 0.71%

US stock market shows resilience despite Alphabet's weak earnings report and concerns over a trade war with China.

The New York Stock Exchange (NYSE) saw mixed results, with the Dow Jones Industrial Average rising by 317.24 points (0.71%) to close at 44,873.28. The Standard & Poor's 500 Index also gained 23.60 points (0.39%), ending the day at 4,061.48. Meanwhile, the Nasdaq Composite climbed 38.31 points (0.19%), finishing at 19,692.33. While the market initially dropped due to disappointing earnings from Google’s parent company, Alphabet, it rebounded as trade war concerns eased and market participants responded to optimistic expectations surrounding US-China negotiations.

Alphabet's earnings report, released after the market closed on February 4, showed weaker-than-expected results, particularly in its cloud business. This caused a sharp drop in Alphabet's stock, with A-shares falling by 7.30% and C-shares dropping by 6.94%. The market had high hopes for Alphabet's cloud division, which failed to meet expectations, resulting in widespread selling of the stock.

Despite the initial negative impact, the market found support as optimism grew around US President Donald Trump and Chinese President Xi Jinping potentially reaching a trade deal. Although China threatened to retaliate with additional tariffs, the US stock market showed signs of recovery. Analysts speculated that President Trump may be using tariffs as a negotiating tool, which helped calm fears of a full-scale trade war.

In the tech sector, the performance of major stocks was mixed. Nvidia saw a strong rebound with a 5.21% increase in its stock price, driven by bargain-hunting investors. Microsoft and Meta also saw modest gains. However, Amazon’s stock dropped by 2.43%, and Tesla fell by 3.58%. Apple experienced slight declines as well, reflecting broader market sentiment.

Meanwhile, Advanced Micro Devices (AMD), which is often seen as a competitor to Nvidia, reported better-than-expected earnings after the market closed on February 4. Despite this positive news, AMD's stock fell by 6.30% on February 5 due to disappointing performance in its key revenue-generating segment—the data center AI semiconductor division.

Economic data released on February 5 further contributed to market sentiment. The ADP National Employment Report revealed that private-sector employment increased by 183,000 in January, surpassing both the previous month’s adjusted gain of 176,000 and the market’s expectations of 150,000. This strong job growth signaled a healthy labor market, but other economic indicators painted a more mixed picture.

The Institute for Supply Management (ISM) reported that the US service sector continued to expand, though at a slower pace. The January Purchasing Managers' Index (PMI) for the service sector dropped to 52.8, down from 54.0 in December. A PMI reading above 50 indicates expansion, but the decline in the index suggests a slight moderation in growth within the services industry.

In conclusion, the New York Stock Market showed resilience on February 5, with the Dow Jones and S&P 500 posting gains despite disappointing earnings from major companies like Alphabet. While concerns over the US-China trade dispute and mixed economic data lingered, investor optimism about potential trade negotiations and job market strength helped the market recover from initial losses.