The stock market is falling because Amazon.
Amazon is a leading online retailer and one of the highest-grossing e-commerce aggregators.
One frequent answer is, shares of Amazon (NASDAQ: AMZN) fell on Tuesday after interest rates rose and an analyst warned that rising labor costs could pressure the e-commerce giant’s profits.
Is Amazon’s stock losing ground?
After all, in the decade ending 2020, Amazon’s revenue grew at a 27.4% average annual rate while its stock soared at 33.2% a year. The company is losing ground so far this year. As of July 30, Amazon stock was up 10.5% — trailing the S&P 500’s roughly 17% increase.
Shares of Amazon ( NASDAQ: AMZN) fell 10.3% in January, according to data from S&P Global Market Intelligence. The main driver for the e-commerce and cloud-computing giant stock’s decline was weakness in the overall market, as we’ll explore in a moment.
Why did Amazon stock drop more than 6% in pre-market trading?
Shares of the tech beast dropped more than 6% in pre-market trading on Friday after the company surprisingly missed on sales estimates. Several factors in the report are likely weighing on the minds of investors. First, the headline sales miss marked the first time Amazon ( AMZN) missed consensus revenue forecasts in three years.
What’s causing stock prices to fall?
Additionally, Amazon, Apple, and Meta Platforms investors are also processing two other bits of news that could be causing their stock prices to fall. The first is that some bond yields reached nearly two-year highs last week. The two-year Treasury note topped 1% last week, the highest it’s been in nearly two years.
You may be asking “Why are tech stocks trading lower Tuesday morning?”
Shares of several big tech companies, including Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Amazon. Com, Inc. (NASDAQ: AMZN), are all trading lower Tuesday morning amid a rise in Treasury yields, which has pressured growth stock valuations.
What will happen to the stock market in 2022?
Concerns over Fed tapering going into 2022 have continued to drive a market selloff in January. The Federal Reserve is expected to start hiking interest rates and reducing the amount of bonds it buys each month. The Fed may also begin cutting the nearly $9 trillion in assets it’s holding.
Is Amazon’s revenue growth slowing down?
Amazon missed the high end of its revenue forecast for the first time in two years. And the midpoint of its guidance of 13% revenue growth in the third quarter “would be Amazon’s slowest growth rate in 20 years,” noted the Journal.
Why is Amazon’s e-commerce growth slowing?
Chief Financial Officer Brian Olsavsky said during a conference call with analysts that Amazon’s e-commerce growth is slowing as the economy reopens.
Why did Amazon’s sales miss?
First, the headline sales miss marked the first time Amazon ( AMZN) missed consensus revenue forecasts in three years.
Amazon’s “other” segment, which is mostly comprised of advertising-related sales, saw even more impressive gains, with revenue rising a blistering 87%. The strong performances of these high-margin businesses helped Amazon’s net income soar 50% to $7.8 billion, or $15.12 per share.