Amazon’s stock experienced substantial gains on Tuesday, with the share price closing the session up by 3.6%, although it had risen by as much as 5.7% earlier in the day. In comparison, the S&P 500 and the Nasdaq Composite indices saw increases of 2.5% and 2.7%, respectively.
The stock market displayed continued high volatility, but investors welcomed a reprieve with a rebound following a significant sell-off the previous day. A Bloomberg report suggesting that Treasury Secretary Scott Bessent anticipated a de-escalation in the U.S.-China trade war contributed to the bullish trading momentum.
The positive developments helped offset the previous day’s downturn, which had been spurred by President Donald Trump’s intensified criticism of Federal Reserve Chair Jerome Powell. Trump had called for an immediate interest rate cut to bolster U.S. economic growth. Despite the day’s recovery, Amazon’s stock remains down 21% in 2025 and has decreased by 28.5% from its peak.
Regarding the current investment potential of Amazon stock, the company holds leading positions in e-commerce and cloud infrastructure services. The stock might seem appealing at 27.5 times this year’s anticipated earnings, if not for prevailing macroeconomic and geopolitical uncertainties. Amazon’s online retail operations could face significant challenges due to the ongoing trade war, while a subdued economic growth outlook could reduce customer spending on Amazon Web Services (AWS).
For investors ready to accept possible short-term market volatility, Amazon is viewed as having substantial long-term growth potential. AWS positions the company as a key player in the development of artificial intelligence (AI) services, and its e-commerce segment stands to benefit from emerging automation trends. Nevertheless, given the rapidly shifting market dynamics, investors might consider a dollar-cost averaging strategy when building a position in Amazon stock, rather than purchasing all at once.
