Amazon’s stock experienced significant turbulence on Thursday, plunging more than 9.7% to reach an intraday low of $176.92 shortly before 11:00 am EST. This steep decline followed the Trump administration’s announcement of sweeping tariffs on various imports, raising concerns about the potential impact on the company’s e-commerce sales. The stock is currently more than -10% trading below its 200-day Simple Moving Average (SMA). Consequently, market participants are getting more prepped for a move back toward a bear market.
The market was pretty spooked by the news. After this announcement, Amazon’s stock lost almost a tenth of its value, illustrating how jittery investors are over the tech giant’s upcoming performance. Analysts have explained that technical indicator, and most importantly the Fibonacci Retracement level indicates important support levels at $173.37 and $164.44. These levels could be the key in deciding whether these stocks can maintain their short-term upward momentum or not.
Compounding these challenges, Amazon has recently made a strategic move by placing a last-minute bid for the U.S. operations of China’s TikTok. The apparel and sneaker giant hopes to use the wildly popular short video streaming app to help grow more awareness for its burgeoning e-commerce-focused marketplace. This approach mirrors its existing ownership of Twitch, suggesting a concerted effort to expand its advertising reach through social media channels. Investors are understandably skittish as they tread through the murky waters created by such new tariffs and as-yet-unknown international fallout.
Market Reaction to Tariffs
The announcement of tariffs by the Trump administration sent shockwaves through the stock market, impacting several major companies, including Amazon. E-commerce sales are projected to fall as inflation takes a heavier toll on consumers. Investors moved fast, and it took the air out of Amazon’s stock price, which quickly fell. And the company’s shares plummeted after traders just began to understand the impact the new tariffs regime would have.
In early trading on Thursday, Amazon’s stock fell to an intraday low of $176.92. This decline made analysts sit up and take notice over the company’s long-term stability given external forces. The stock has since declined to trade under its 200-day SMA. This key indicator most times indicates a strong bearish market sentiment to most traders.
$166.32 and $152.00 are suggested support levels based on analysts historical Identification. They caution that unless the stock recovers in short order, it won’t stop falling from here. The market’s response just reinforces how sensitive investors are to macro right now. It reveals that government policy decisions can have massive short-term effects on corporate profitability.
Technical Analysis and Support Levels
Traders and analysts alike are watching Amazon’s continued stock performance using various technical analysis tools, specifically Fibonacci Retracement levels. To the downside, the 61.8% level provides continued near-term support at $173.37, with the 78.6% Fibonacci level offering additional support at $164.44. These floors are key for investors who may still be waiting for a turnaround in worst-performing S&P stocks.
With Amazon’s stock trading all the way down below its 200-day SMA. Our senses tell us that countless speculators are expecting an immediate return to a bear case unless the big positive news comes flying in. Recent forces in the market are putting pressure on Amazon’s key competitive advantage. Increasing tariff expenses and changing consumer preferences make it an even taller order.
This historical data tells us that stocks tend to do very poorly whenever they trade below their long-term moving averages. This scenario creates uncertainty for existing investors. In addition to supporting the technical analysis on price trends and support levels, organizations must keep an eye on outside influences. Geopolitical tensions and tariff ramifications on overseas business come to the fore.
Strategic Moves in Response to Market Dynamics
In response to the challenging market environment, Amazon’s bid for TikTok’s U.S. operations signifies a strategic pivot aimed at enhancing its advertising capabilities. By potentially acquiring TikTok, Amazon could tap into a vast user base and leverage social media to drive e-commerce engagement, similar to its existing strategy with Twitch.
This change is now under heightened scrutiny by stakeholders, both domestically and internationally. They are challenging Amazon’s anti-competitive business practices and monopoly power. Investors are understandably spooked. They fear about the risk of foreign governments taking retaliatory action in response to U.S. tariffs which affect multinational companies including Amazon.
Amazon is aggressively expanding its ad business into other channels, such as TikTok. Yet it is simultaneously under siege from increasing regulatory scrutiny and extreme market volatility. How well the company navigates these challenges will be the key in maintaining investor confidence in coming quarters.