S&P 500 trades higher for a second day as investors shake off big decline in Alphabet:

The S&P 500 was only marginally higher on Wednesday, but a look at the moves within New York Stock Exchange-listed stocks shows more dynamic market action.

About two stocks at the NYSE traded higher for every one decliner. Overall, 1,813 names advanced while just 847 slipped, according to FactSet.

— Fred Imbert

Citi cut its price target on Nvidia ahead of its earnings report later this month.

Analyst Atif Malik reduced the 12-month price target to $163 from $175 previously. The new forecast still represents a 37% rally from Tuesday’s close of $118.65. The chipmaker reports quarterly earnings on Feb. 26 after the bell.

“We believe NVDA stock is approaching valuation support levels trading at mid 20’s P/E & 25% discount to ASIC peer average after sell off on mid term AI diffusion restriction concerns and DeepSeek Bull Bear debate on AI infrastructure spend,” the Wall Street firm said in a note to clients.

Citi said it remains bullish on the stock and believes that gross margins will trough in the second quarter.

— Yun Li

The cannabis-themed Amplify Alternative Harvest ETF (MJ) was last trading 8% higher on Wednesday, putting the fund on pace for its best day since April 30, 2024.

This marks a turnaround for the ETF, which shed 30.7% in 2024 and on Monday hit an all-time low back to its inception in 2025.

The ETF was lifted higher by shares of Aurora Cannabis. The cannabis producer surged 45% on Wednesday after reporting a 37% increase in revenue for its fiscal third quarter, attributing this growth to a 51% year-over-year increase in its global medical cannabis segment.

Cannabis pharmaceutical stock Tilray also added 13% on Wednesday after announcing that its Surf Beer Golden Ale would be available for JetBlue customers on all domestic and international flights starting this month.

— Nick Wells, Lisa Kailai Han

Small-cap stocks outperformed the three major averages on Wednesday, with the Russell 2000 index gaining around 0.7% in morning trading.

The index’s move higher was led by gains in BigBear.ai, which rose 37% after the company was awarded a Department of Defense contract to advance its Virtual Anticipation Network, or VANE, prototype. The contract seeks to bolster the capabilities of the department’s Chief Digital and Artificial Intelligence Office in assessing news media from possible foreign adversaries.

The move was also led by Mercury Systems, Griffon, Champion Homes and Ichor Holdings following their latest quarterly results. Mercury Systems rose 18%, while Griffon and Champion Homes gained 9% and 11%, respectively. Ichor, meanwhile, advanced 6%.

— Sean Conlon, Gina Francolla

The Japanese yen strengthened against the dollar on strong wage data out of Japan.

The greenback last fell 1.3% versus the yen at 152.26, marking the yen’s strongest level since December.

Nominal wages grew at their fastest level since 1997 in December 2024, raising hopes for further rate cuts from the Bank of Japan.

Shares of Capri tumbled 14% on Wednesday after the parent company of Versace, Jimmy Choo and Michael Kors reported mixed fiscal third-quarter results.

In the last quarter, Capri reported adjusted earnings of 45 cents per share, while analysts polled by FactSet had expected earnings of 66 cents per share. Capri’s $1.26 billion in revenue came in line with expectations.

“Overall, our business remained challenged during the quarter and we were disappointed with our results,” said CEO John Idol.

Capri also guided for full-year revenue and adjusted operating income that was below FactSet consensus. The stock’s Wednesday slide put it on pace for its worst day since Oct. 25, 2024, when the share price was nearly halved.

— Nick Wells, Lisa Kailai Han

Service sector activity grew at a slower-than-expected pace in January, according to an Institute for Supply Management survey released Wednesday.

The ISM services index posted a reading of 52.8%, down 1.2 percentage points from December and below the Dow Jones forecast for 54.3%. The survey gauges the percentage of businesses showing expansion.

New orders dropped 3.1 points, business activity was off 3.5 points and prices fell 4 points, though the index was still a robust 60.4% and indicative of ongoing price pressures. Employment increased 1 point to 52.3%.

— Jeff Cox

Imports hit a record level in December, swelling the U.S. trade deficit to its highest level since the depths of the Covid-19 pandemic, the Census Bureau reported Wednesday.

The deficit totaled $98.4 billion for the month, surging nearly 25% and even steeper than the Dow Jones estimate for a shortfall of $96.8 billion. Imports, which subtract from GDP calculations, rose to $364.9 billion, up $12.4 billion from November, while exports contracted to $266.5 billion, down $7.1 billion.

For the full year, the goods and services deficit was $1.2 trillion, up from $1.06 billion in 2023.

President Donald Trump is threatening to enact broad-based tariffs to slow the flow of fentanyl and illegal immigration, as well as to level the global playing field.

— Jeff Cox

Check out the companies making headlines in premarket trading:

• Alphabet — The Google parent tumbled 7% after fourth-quarter revenue of $96.47 billion lagged the $96.56 billion estimated by analysts polled by LSEG. Alphabet also said it plans to invest $75 billion in 2025 as it expands its artificial intelligence strategy, more than the $58.84 billion consensus estimate, according to FactSet.
• Workday — The cloud applications provider climbed 5.5% after announcing a restructuring plan expected to eliminate roughly 8.5% of the workforce.
• Uber — The ride-hailing company fell 5% after cautioning that the strong dollar could weigh on first-quarter gross bookings. Uber’s fourth-quarter revenue of $11.96 billion beat expectations of $11.77 billion, according to LSEG estimates.
• PDD — The Chinese e-commerce platform lost about 7.1% after the U.S. Postal Service suspended inbound packages from China and Hong Kong “until further notice.” PDD, the parent of Temu, relied on a popular trade loophole known to keep prices low as it expanded in the U.S. The USPS later reversed course, saying Wednesday it would resume accepting packages from China.

For the full list, read here.

— Pia Singh

Shares of Uber fell nearly 5% in the premarket on Wednesday after the ride-sharing company posted better-than-expected fourth-quarter revenue but issued weak first-quarter guidance.

Uber said it is forecasting gross bookings for the current quarter to come in between $42 billion and $43.5 billion. Analysts’ estimates were around the top of this range, according to FactSet.

However, revenue for the fourth quarter topped Wall Street estimates. The company posted $11.96 billion for the period, above the $11.77 billion that analysts surveyed by LSEG were expecting.

Disney shares wavered after the media giant posted fiscal first-quarter results that exceeded expectations.

The company earned an adjusted $1.76 per share on revenue of $24.69 billion. Analysts polled by LSEG expected a profit of $1.45 per share on revenue of $24.62 billion.

However, the company said Disney+ subscriptions declined slightly during the quarter, adding that it expects another “modest decline” during the fiscal second quarter.

— Fred Imbert

Apple shares were down more than 2% in the premarket after Bloomberg News reported, citing sources, that Chinese regulators were thinking about opening an investigation into the company’s App Store fees and policies.

Asia-Pacific markets mostly rose Wednesday after Wall Street rose overnight, shrugging off Trump tariffs and China’s retaliatory measures.

Mainland China’s CSI 300 Index started the day up, but reversed course to fall 0.58% to close at 3,795.08.

Hong Kong’s Hang Seng index was down 0.97% in its final hour of trade.

Japan benchmark Nikkei 225 rose 0.09% to close at 38,831.48, while the broader Topix index gained 0.27% to close at 2,745.41.

South Korea’s Kospi rose 1.11% to close at 2,509.27 and the small-cap Kosdaq gained 1.54% to close at 730.98.

— Lee Ying Shan

Alphabet’s stock drop after its latest earnings results is an “overreaction,” according to Deepwater Asset Management’s Gene Munster.

Shares slid 8% Tuesday night after the Google parent posted a cloud revenue miss, even as it ramps up spending on artificial intelligence, spooking investors who worried the megacap tech company will take longer to capitalize on its artificial intelligence ambitions.

Alphabet posted Google Cloud revenue of $11.96 billion in the fourth quarter, lower than the $12.19 billion StreetAccount consensus estimate. The company said it will invest about $75 billion in capital expenditures in 2025, more than the $58.84 billion expected, according to FactSet.

Still, Deepwater Asset Management’s Munster said investors focusing on the cloud revenue disappointment are missing the point, saying the AI hardware trade still has room to run.

“I think this is an overreaction,” Munster told CNBC’s “Fast Money” on Tuesday. “I think the stock should be flat-ish on these results, versus down 8%.”

“I think that this AI hardware trade still has another year or two years left in it,” he added.

— Sarah Min

Check out the companies making headlines after hours:

• Alphabet — Shares dropped 7.4% after Google parent Alphabet posted a revenue miss. Fourth-quarter revenue of $96.47 billion fell short of the $96.56 billion expected by analysts polled by LSEG. On the other hand, earnings per share of $2.15 exceeded the $2.13 consensus estimate.
• Chipotle Mexican Grill — Shares of the burrito chain fell nearly 5% after fourth-quarter same-store sales rose less than expected and the company said the key metric would show only low- to mid-single-digit growth in fiscal 2025. In the fourth quarter, Chipotle earned 25 cents per share, after adjustments on revenue of $2.85 billion. Earnings were stronger than expected, while revenue was in line with consensus expectations from LSEG.
• Electronic Arts — Shares of the video game company rose 1% even after Electronic Arts posted third-quarter results that exceeded expectations. Electronic Arts reported earnings of $1.11 per share on revenue, known as net bookings, of $2.22 billion. Analysts polled by LSEG had expected earnings of $3.07 per share on revenue of $2.32 billion.

Read the full list here.

— Sarah Min