Amazon Stock Slides: What's Happening?
Amazon.com Inc (NASDAQ: AMZN ) shares are slipping Tuesday along with the broader tech sector as investors brace for Wednesday’s Federal Reserve rate decision, with markets pricing in a rate hike. Here’s what you should know. Amazon.com shares are experiencing downward pressure. Why are AMZN shares declining? Markets Brace For a Rate Hike as FOMC Decision Looms Tech stocks broadly are trading lower today amid renewed concerns about a slowdown in AI spending and growing anticipation of tomorrow afternoon’s Federal Reserve rate decision. According to the CME FedWatch tool, markets are pricing in a 92.5% probability that the Fed raises its target rate to a range of 375 to 400 basis points from the current 350 to 375 range, a sharp shift from just a month ago, when traders assigned only a 33.1% chance of a hike. Higher rates tend to weigh on growth stocks by compressing the present value of future cash flows in valuation models. Amazon has also guided for substantial capital expenditures tied to its cloud and AI infrastructure buildout, and rising rates increase the cost of financing that spending, making the return on those investments look less attractive by comparison. AWS Can’t Res
com Inc (NASDAQ: AMZN ) shares are slipping Tuesday along with the broader tech sector as investors brace for Wednesday’s Federal Reserve rate decision, with markets pricing in a rate hike. Here’s what you should know. com shares are experiencing downward pressure. Why are AMZN shares declining?
Markets Brace For a Rate Hike as FOMC Decision Looms Tech stocks broadly are trading lower today amid renewed concerns about a slowdown in AI spending and growing anticipation of tomorrow afternoon’s Federal Reserve rate decision. 1% chance of a hike. Higher rates tend to weigh on growth stocks by compressing the present value of future cash flows in valuation models. Amazon has also guided for substantial capital expenditures tied to its cloud and AI infrastructure buildout, and rising rates increase the cost of financing that spending, making the return on those investments look less attractive by comparison.
AWS Can’t Restore Access to Bahrain, One UAE Data Zone Separately, Amazon’s cloud division disclosed it won’t be able to bring its Bahrain facility back online or recover one of three data-hosting zones it operates in the United Arab Emirates, after both sustained damage tied to the broader Iran conflict, according to a status update Reuters reviewed. The company said the harm done to its Bahrain operations went beyond what its infrastructure, including systems built to handle failures across multiple zones at once, was ever built to absorb.
The roots of this go back to March, when Iran found itself targeted by joint American and Israeli military action, prompting Tehran to fire back with missiles and drones aimed at Israel and at Gulf nations hosting American forces. That exchange left two of AWS’s UAE sites hit directly, while a nearby drone strike caused physical harm to one of its Bahrain locations. AWS indicated repair work is underway on the damaged UAE zone, with more details on when service might return expected sometime in the next few months. A similar update for Bahrain isn’t expected to come until early next year.
AWS Strikes Multi-Year Partnership With AI Coding Startup Cognition On a more positive note for Amazon, AWS has entered a multi-year partnership with Cognition, maker of the autonomous coding agent Devin, to help businesses modernize legacy software and clear engineering backlogs using AWS infrastructure. 89 at the time of publication on Tuesday, according to Pro. Read Also: Costco Nearly Doubles Motor Oil Prices, Limits Purchases to '1 Transaction Per Membership' as Iran War Squeezes Supply Image: Shutterstock