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Amazon stock has declined nearly 10% on Thursday, dropping more than 9.7% to an intraday low beneath $177 after new tariffs were announced. The Dow Jones Industrial Average fell 3.7%, with the S&P 500 down 4.4%, while the NASDAQ suffers its worst day in years at 5.7%.
The US stock market may lose around $2 trillion due to these tariffs. Amazon’s e-commerce sales could be adversely affected, with potential for foreign scrutiny of large companies, particularly from China concerning Alphabet.
Amazon TikTok Bid and National Security Concerns
Amazon’s bid for TikTok’s US operations appears overlooked, as other companies like Oracle and Rumble have submitted more competitive offers. There is bipartisan concern regarding TikTok, viewed as a national security threat, which impacts companies like Amazon aiming to expand their advertising platforms.
The selling pressure affects mega cap stocks, with 5-Year US Treasury yields dropping 5.7%. Index investors are selling off equity holdings, which forces the sale of underlying stocks within major indices. Amazon stock reached a low of $176.92 but has since recovered towards $181.
Trading below its 200-day Simple Moving Average signifies a possible ongoing downward trend. Support levels are indicated at $173.37 and $164.44, while historical supports sit at $166.32 and $152.00. A break above $185.91 could suggest recovery from the recent plunge.
The sharp decline in Amazon shares, almost 10% intraday, coincided directly with the announcement of new trade tariffs. The stark downturn wasn’t isolated, though — major indices slid in tandem, with the NASDAQ having its worst performance in years. These types of fast-moving declines tend to indicate a broad shift in sentiment, more likely to be driven by fundamental revaluation than temporary overreaction.
Broader Market Impact and Technical Factors
The loss in value – reportedly nearing $2 trillion for the broader market – points to a sudden repricing of risk, especially in companies with high exposure to international trade. In Amazon’s case, its vast global supply chain and reliance on international logistics could face material cost increases under the new tariffs. That doesn’t just compress operating margins — it potentially alters growth assumptions tied to its e-commerce segment.
Alphabet is under examination too, with speculation of increased scrutiny from China. The timing, not coincidentally, aligns with geopolitical fears that tech giants with international reach may face regulatory retaliation as relations between East and West strain further. We think this could challenge not only valuation multiples but forward guidance across the sector.
Despite Amazon dipping below $177 at its lowest, the brief intraday recovery toward $181 shows some underlying buying interest. However, its trading below the 200-day Simple Moving Average casts a longer shadow. That average, as a barometer for broader trend direction, tends to shape technical trading strategies, including those used in delta-neutral or volatility-based options structures.
There remains a clear tier of nearby support: short-term buyers may begin eyeing the $173-$164 range, where prior congestion hints that order flow could stabilise. Further below, long-term holders might recall levels from previous correction lows at $166 and $152. These aren’t just historical numbers — they influence risk-reward ratios for option writers and define inflection points for stop-loss algorithms embedded in automated trading systems.
Importantly, a move above $185.91 would not merely be technical noise — it would shift momentum indicators upward, which we’ve seen act as triggers for short-covering and risk reallocation back into large-cap names. Until then, directional traders should consider volatility still in play.
Bank yields have slipped sharply, with five-year US Treasuries down 5.7%. This is usually a flight toward safety, a classic shift into bonds when uncertainty spikes. But there’s more under the surface — lower yields impact discount rates used in equity valuation models. That pushes future cash flows higher in present value terms, but the accompanying risk signals often outweigh the theoretical benefit in harm-laden environments like this.
There’s also option market positioning to consider. Selling pressure forced the liquidation of index-linked assets, suggesting that systematic funds and large allocators are adjusting exposure quickly. Gamma exposure certainly flipped negative during the downturn, adding fuel to intraday volatility. In such conditions, traders relying solely on price levels might find themselves caught if they’re not accounting for underlying volatility expansion.
We’re seeing a clear reset of positioning among derivatives desks. Hedging demand is elevated, pushing implied volatilities higher across expiries. If we look at skew, there’s evidence of protective put flows increasing, not only on Amazon but across correlated mega-cap stocks. That tells us sentiment hasn’t shifted just temporarily — it’s been reframed methodically.
From a strategic point of view, rangebound plays or vertical spreads could be more rational than attempts to catch a directional move. With momentum weak, and macro drivers unpredictable, market makers are less likely to narrow spreads, so liquidity might remain thin outside the core prices. Timing isn’t everything, but entries during contraction rather than climax tend to protect capital better in environments like this.
We’ll have to keep an eye on volumes, particularly institutional blocks, which have started to indicate that the prior rotation out of growth might not be done. It’s not just about Amazon’s fundamentals anymore — macro-setting decisions like trade policy and cross-border data regulation are re-entering the valuation discussion, and we have little reason to believe we’ve seen the end of that.
