Amazon stock craters nearly 10% as Trump tariffs take toll on market

AMZN shares sold off as much as 9.7% on Thursday following the onset of US tariffs.
President Donald Trump announced sweeping tariffs against all foreign nations on Wednesday.
Dow Jones loses nearly 4%, NASDAQ skids 5.5% in tariff-induced bloodbath.
Amazon placed a last minute bid for the US operations of China's TikTok platform.

Clay Webster FXStreet

Amazon (AMZN) stock has lost nearly a tenth of its value on Thursday following the Trump administration’s announcement of sweeping tariffs late Wednesday. 10% base level tariffs worldwide and much higher tariffs on about 60 other countries, not to mention 25% tariffs on foreign-made automobiles, has sent shockwaves through the US stock market.

Amazon stock plunged more than 9.7% to an intraday low beneath $177 at the time of writing. The Dow Jones Industrial Average (DJIA), which includes Amazon, has lost 3.7%, while the S&P 500 skids 4.4% lower. The NASDAQ is headed for its worst day in years, with the tech-heavy index down 5.7%.

All in all, Bloomberg estimates the US stock market will lose some $2 trillion on Thursday, and many observers expect the current downturn to have far-reaching consequences.

Amazon stock news

Tariffs will certainly hurt Amazon's e-commerce sales, and investors have to be wary about foreign countries responding to the new US tariff regime with scrutiny of its largest companies. China has already taken a dim view of Alphabet (GOOGL), responding to Trump’s first 10% tariff on its goods with an antitrust case against the search giant.

Amazon sent a last minute bid for the US operations of China’s TikTok on Wednesday. The company sent them to Vice President JD Vance and Commerce Secretary Howard Lutnick, but rumors emerged that it was a low bid and was not being taken seriously by the administration.

The Trump White House set an April 5 deadline for TikTok to divest its US operations, and many bids have come in late. Among them are Oracle (ORCL), Rumble (RUM) and OnlyFans founder Tim Stokely.

Politicians from both political parties have deemed TikTok a national security threat, and some have specifically zeroed in on anti-Israel sentiment on the social media site. For its part, Amazon already owns the Twitch video streaming platform and would similarly use TikTok to advertise its e-commerce products.

Mega cap stocks like Amazon are also feeling the brunt of selling pressure stemming from index investors. The 5-Year US Treasury saw its yield drop 5.7% on Thursday as investors sold off US equity holdings and piled into government bonds. The heavy selling of S&P 500, Dow Jones and NASDAQ ETFs is forcing index platforms to sell the underlying stock.

No one knows the future, but based on valuation and profitability, Amazon stock scores better than most other Magnificent 7 stocks, so this could mean that it stands to lose less ground during an extended downswing in the market.

Amazon stock forecast

Amazon stock reached an intraday low at $176.92 a little before 11:00 am EST. Since then, AMZN has ben recovering back toward $181.

Since AMZN stock is trading below its 200-day Simple Moving Average (SMA), traders' best guess will be a return to the downtrend soon enough. The Fibonacci Retracement at 61.8% suggests support at $173.37, as well as the 78.6% Fibo at $164.44.

Historical support sits at $166.32 and $152.00. However, a break above the 38.2% Fibo at $185.91 should mean that Amazon stock is out of the dire straits and that the morning's crash was just a short-term shock.

AMZN daily stock chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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