Why Amazon Stock Is Sinking Today

Amazon (NASDAQ: AMZN) stock is heading lower in Monday's trading. The tech giant's share price was down 2.2% at 1:30 p.m. ET amid a decline of 0.5% for the S&P 500 index and a 1.3% decline for the Nasdaq Composite index. The stock had dipped as much as 4.2% earlier in the day.

Amazon is falling today as investors sell out of stocks in response to concerns about the impact of new tariffs set to go into effect on April 2. The company's share price is also under pressure due to a downward price-target revision from an analyst.

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Tariff concerns are weighing on Amazon stock

With comments made yesterday, President Trump dashed hopes that he might take a more moderate approach to reciprocal tariffs that are set to be introduced on Wednesday. Instead of offering lower import taxes for some countries or product categories, it looks like the administration will implement broad-based new tariffs on foreign-sourced goods.

With wide-ranging new tariffs set to go into effect, investors are worried that the U.S. economy could enter a recession this year. Some economists also expect that the new import taxes will accelerate inflation. This combination of macroeconomic risk factors is rattling the market and prompting sell-offs for Amazon and other growth stocks.

Jeffries lowers its price target on Amazon

Jeffries published new coverage on Amazon today and lowered its price-target forecast for the stock. While the firm continues to rate Amazon a buy, it reduced its one-year price target from $275 per share to $250 per share. As of this writing, the new price target still implies a potential upside of approximately 32%.

In its note on Amazon, Jeffries said that it was lowering its valuation target due to macroeconomic concerns. Valuation multiples are contracting in response to these risk factors, and a weaker economic backdrop could also lead to weaker software revenues in the tech sector.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.