Amazon (NASDAQ: $AMZN) Drops 8% as Trump Tariffs Shake Markets. Amazon (NASDAQ: NASDAQ:AMZN ) is facing huge downward pressure following President Donald Trump's announcement of sweeping tariffs. The stock dropped 9.26% in early trading, reaching $176.92 as of 11:01 AM EDT.
These tariffs impact over 100 countries, including China, a key supplier for third-party merchants on Amazon’s platform. Rising import costs could push prices higher, affecting consumer spending and Amazon’s profit margins.
Looking at the broader market, it is also struggling from the tariffs. The Magnificent Seven stocks, including Apple, Nvidia, Meta, Tesla, Alphabet, Microsoft, and Amazon, have all seen huge drops.
Amazon’s 8% drop is among the largest, further highlighting its vulnerability to trade disruptions. If these tariffs persist, they could reignite inflation, weigh on economic growth and further impact stock prices. Amazon has faced major market shifts in the past. In 2022, its stock lost over 50% of its value within a few quarters.
The question now is, can the current decline lead to similar losses?
With Amazon trading at $242 in February, some fear it could drop below $120 if the economic outlook worsens.
Adding to concerns, geopolitical risks remain high. The ongoing war in Ukraine, coupled with uncertainty over future U.S policies, creates a volatile environment for stocks. Amazon’s reliance on global supply chains and consumer spending makes it highly sensitive to market shocks.
Technical Analysis
Looking at Amazon technically, there has been a downtrend since early February when it reached an all-time high and a 52-week high of $242. This peak came shortly after the presidential inauguration, but since then, the market conditions have not been favorable. The introduction of new tariffs has fueled bearish momentum, pushing Amazon lower toward key support levels.
Currently, the stock is testing a double support level, an ascending trendline and a horizontal support around $180. If buyers step in at this level, a rebound could occur, targeting the previous $252 all-time high. However, given the economic uncertainty, there is a strong chance the stock may break below this current support.
If the weekly candle closes strongly below the $180 level, the next critical point where the stock might find support is around $144. This area has historically provided strong buying interest and it may serve as a potential bottom if the decline continues.
Looking at momentum indicators, the weekly RSI currently sits at 33, indicating strong bearish momentum. Despite the reading approaching the oversold reading, macroeconomic data shows the downtrend remains dominant and further losses could be ahead.
What's the Outlook? Can Amazon Recover Soon?
The coming weeks will be crucial for Amazon’s stock. With earnings expected between April 28th and May 2nd, market sentiment may shift based on revenue growth and profit margins. However, ongoing trade uncertainties and rising costs remain key risks.
For now, monitor price action around the current market price of $180. A strong bullish move could confirm a short-term recovery. On the other side, a break below this double support level may signal a further drop towards $144 support level.
