Why Amazon Stock is dropping again today?

After having its worst day in more than 15 years on Friday following the release of its first-quarter earnings. The stock price of Amazon (AMZN 0.18 percent) resumed its downward spiral this morning.

Fears of an upcoming interest rate hike by the Federal Reserve. Negative sentiment toward the stock following the company’s recent quarterly financial results. The fact that Wedbush analysts removed the stock from their “Best Ideas List” were among the reasons why investors were selling Amazon’s stock this morning.

This morning, the stock was down as high as 4.8 percent and was down 1.9 percent as of 10:40 a.m. ET.

After Amazon revealed decelerating revenue growth in its first quarter. Investors have been in a bad mood for the past several trading days. In the fourth quarter of 2021, total sales climbed by only 7% year over year, compared to 9% growth in the previous quarter.

Amazon’s operating income fell 58 percent in the quarter as a result of growing costs due to supply chain challenges, inflation, and the business raising compensation to entice staff. Management also announced dismal second-quarter projections, with revenue continuing to decline and operating income potentially falling to a $1 billion deficit.

Analysts at Wedbush pulled Amazon’s shares from its “Best Ideas List” this morning, citing the company’s recent results, as investors were still processing all of that negative news.

Finally, some investors may have been selling Amazon this morning because they expect the Federal Reserve to boost interest rates at its meeting later this week.

Chairman of the Federal Reserve, Jerome Powell, has previously stated that a significant rate hike of 50 basis points is “on the table.”

Investors are fearful that if the Fed responds too strongly to sky-high inflation, the economy may begin to slow.

Amazon’s Investors may want to prepare for additional price volatility in the near future. Investors are concerned about growing prices and the U.S. economy, therefore the broader stock market has been volatile recently.

Amazon will almost certainly continue to be an excellent long-term investment, but with the Fed focused on managing inflation and the company coping with rising costs and falling sales, investors will need to be patient during this difficult period.

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