Amazon Shares Fall Amid Geopolitical Tensions and AI Spending

Shares of Amazon.com Inc. fell more than 2% on Tuesday to 254.38 dollars, tracking a broader decline in U.S. stock indexes. The market downturn followed reports that projectiles struck Saudi-owned and South Korean-owned oil tankers on Monday night during renewed hostilities between the United States and Iran in the Strait of Hormuz.

Investor anxiety was further compounded by 10-year Treasury yields reaching 4.78%, the highest level since January 2025. This spike stoked inflation concerns and expectations that the Federal Reserve System may increase interest rates.

Beyond macroeconomic pressures, Amazon faced company-specific headwinds, including e-commerce tariffs and a loss of cloud market share to Google and Microsoft. Investors expressed particular concern over a record 200 billion dollar capital expenditure budget dedicated to AI infrastructure. CEO Andy Jassy defended the spending, stating he expects the company to generate "strong long-term returns on invested capital" from AI demand.