TLDR
- Amazon stock fell 5% this week, closing at $221.53 on Wednesday
- Federal Reserve rate concerns are driving tech sector weakness
- Company eliminated $9.99 Prime grocery delivery fee and expanded to 2,300 cities
- Stock testing critical 50-day moving average support around $226
- Technical indicators show bearish momentum building
Amazon shares faced renewed selling pressure this week, dropping nearly 5% as Federal Reserve policy concerns weighed on technology stocks. The e-commerce giant closed Wednesday at $221.53, down 1.00% for the day.
The decline comes despite positive developments in Amazon’s grocery delivery business. The company announced plans to reach 2,300 cities by year-end and eliminated its $9.99 monthly delivery fee for Prime members.
Recent Fed commentary has sparked investor concerns about potential interest rate increases. This shift in monetary policy expectations is pressuring growth stocks across the technology sector.
Amazon’s struggles began after its July earnings report. While the company beat analyst estimates, cautious forward guidance led to a $25 stock price drop in late July.
Technical Analysis Shows Weakness
The stock is now testing its 50-day simple moving average, a key technical support level around $226. This threshold has provided stability for Amazon shares in recent months.
However, technical indicators suggest further weakness ahead. The stochastic indicator continues trending lower, pointing to bearish momentum.
If Amazon breaks below the 50-day moving average, analysts see potential downside targets at $215 and $200. These levels could serve as the next major support zones.
Trading volume remains average, indicating neither strong buying nor aggressive selling. This tepid activity suggests uncertainty about the stock’s near-term direction.
Grocery Strategy Expansion
Amazon is pushing hard into grocery delivery despite stock weakness. The company’s expansion to 2,300 cities represents one of its most aggressive delivery rollouts.
Prime members now receive free same-day delivery on orders over $25. This eliminates the previous monthly fee structure and could boost customer adoption.
The grocery push aims to increase Amazon’s share of consumer spending. Same-day delivery availability will expand to over 1,000 locations by year-end.
Investors remain cautious about these operational improvements. Market participants are focusing more on macroeconomic concerns than business developments.
Rate fears continue dominating technology stock performance. Higher borrowing costs could reduce consumer spending and business investment in the sector.
Amazon’s delivery network expansion may provide long-term benefits once rate uncertainty subsides. The company’s infrastructure investments position it well for future growth.
Current market conditions favor defensive positioning over growth stock exposure. Amazon faces headwinds until Federal Reserve policy direction becomes clearer.
The stock closed Thursday at $222.00, down $1.81 or 0.81% from the previous session’s close.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
