Why Amazon Stock Is Falling Again Today

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What happened

The share price of Amazon (AMZN -2.38%) continued its downward spiral this morning after the e-commerce stock had its worst day in more than 15 years on Friday following the release of its first-quarter results.

Investors were dumping Amazon’s stock this morning for several reasons, including fears of an upcoming interest rate hike by the Federal Reserve, negative sentiment toward the stock following the company’s recent quarterly financial results, and the fact Wedbush analysts removed the stock from their “Best Ideas List.”

The stock was down by as much as 4.8% this morning and had fallen 1.9% as of 10:40 a.m. ET. 

So what 

Investors were already in a sour mood over the past couple of trading days after Amazon reported decelerating revenue growth in its first quarter. Total sales increased by just 7% year over year, compared to 9% growth in the fourth quarter of 2021. 

Image source: Getty Images.

Additionally, rising costs due to supply chain issues, inflation, and the company increasing wages to attract workers all led to Amazon’s operating income declining 58% in the quarter. Management issued disappointing second-quarter guidance as well, with revenue continuing to slow and operating income that could come in at a potential $1 billion loss.  

Investors were already continuing to process all of that bad news when analysts at Wedbush removed Amazon’s stock from its “Best Ideas List” this morning in light of the company’s recent results. 

And finally, some investors may have been exiting their Amazon position this morning as they anticipate that the Federal Reserve will raise interest rates at its upcoming meeting this week. 

Federal Reserve Chairman Jerome Powell has already indicated that a substantial rate hike of 50 basis points is “on the table.” 

Investors are concerned that the economy could begin slowing down if the Fed acts too aggressively to tackle sky-high inflation. 

Now what 

Amazon investors may want to brace themselves for more share price swings in the near term. The broader stock market has been unstable lately as investors worry about rising inflation and the U.S. economy. 

Amazon will likely still be a good long-term investment, but with the Fed focused on taming inflation and the company dealing with rising costs and slowing sales, Amazon investors will need to be patient during this turbulent time.