Amazon Shares Pop As Powell Signals Looming Rate Cuts Amid Cooling Labor Market
Amazon shares rose 3.04% to $228.71 following Federal Reserve Chair Jerome Powell's dovish remarks at Jackson Hole, indicating potential rate cuts amid a cooling labor market. Lower interest rates are favorable for growth companies like Amazon, as they reduce financing costs and enhance the value of future earnings, particularly from Amazon Web Services. Powell's comments on inflation risks further support a more accommodating policy, which could boost consumer spending and benefit Amazon's retail operations during the holiday season.
Amazon.com Inc AMZN shares are trading higher Friday afternoon after Federal Reserve Chair Jerome Powell struck a surprisingly dovish tone at Jackson Hole, signaling that rate cuts could be on the horizon as the labor market cools and economic growth slows.
What To Know: For growth companies like Amazon, lower interest rates are particularly bullish. Amazon relies on heavy reinvestment in logistics, data centers and cloud infrastructure to drive long-term expansion.
Higher borrowing costs have weighed on both Amazon's financing expenses and investor appetite for high-growth assets. With Powell acknowledging that "the balance of risks may warrant adjusting our policy stance," markets are now pricing in earlier and steeper cuts, reducing Amazon's cost of capital.
At the same time, Amazon's valuation, like most tech and growth names, is highly sensitive to interest rate expectations. Future earnings from Amazon Web Services, its dominant profit engine, are discounted more heavily in a high-rate environment. The prospect of lower rates makes those future cash flows more valuable, lifting equity valuations.
Powell also downplayed inflation risks from tariffs, calling the impact a "one-time shift in the price level." That gives further room for accommodating policy, a boon for consumer spending. With household budgets under strain, cheaper credit could support e-commerce demand heading into the holiday season, directly benefiting Amazon's retail arm.
Price Action: According to data from Benzinga Pro, AMZN shares are trading higher by 3.04% to $228.71. The stock has a 52-week high of $242.52 and a 52-week low of $161.43.
Read Also: Why Jackson Hole Is The Fed’s Mountaintop Moment—And Why It Matters More Than Ever
How To Buy AMZN Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Amazon.com’s case, it is in the Consumer Discretionary sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
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