Stocks on Wall Street plummeted on Friday, with the US entering its worst week in months as the market feared the Federal Reserve could raise interest rates earlier than expected.
The pioneering Dow Jones Industrial Average posted a weekly loss of 3.5% – the biggest drop since October – as investors turned away from value stocks. The benchmark S&P 500, meanwhile, fell 1.9%, its biggest weekly loss since February.
The , underperformed, losing only 0.3% in the same period when technical trading returned to favor.
This week we have another series of notable earnings reports from companies like Nike (NYSE:), and FedEx (NYSE:), as well as a key congressman from Fed Chair Jerome Powell. It's going to be a busy week for Wall Street.
Replying to market trends this week, below we highlight one stock that is likely to be in high demand and another that could fall further.
Remember, however, that our timetable is for the coming week only.
Stock to Buy: Amazon
This is a big week for Amazon.com (NASDAQ:) as it kicks off during the annual Prime Day shopping spree – which is expected to be one of the biggest shopping events in history – at 3:00 AM ET on Monday.
The two-day event, which gives Prime members the chance to score incredible deals, will include discounts on more than two million items, according to the company.
While the e-commerce giant is not releasing official Prime Day sales figures, many expect online spending at this year's event to overshadow last year's total.
According to the digital research arm of software company Adobe, Amazon's Prime Day 2021 is forecast to bring in $11 billion, compared to $10.4 billion in revenue at last year's event, which took place in October as a result of the COVID-19 pandemic.
In addition, 6 in 10 Americans surveyed have told Adobe that they plan to shop during Prime Day this year.
"We expect Prime Day this year to surpass the Cyber ??Monday spend level of 2020," said Jason Woosley, vice president, commerce product and platform at Adobe Experience Cloud. "It's a huge elevator that takes place in mid-June."
AMZN shares ended Friday at $3,486.90, less than 2% below the all-time high of $3,552.25 reached in September.
With a valuation of $1.76 trillion, Seattle, Washington-based e-commerce and cloud is the third most valuable company listed on the U.S. stock exchange, behind only Apple (NASDAQ:) and Microsoft (NASDAQ:) .
That said, Amazon has lagged relatively behind the large-cap tech leaders this year, at just about 7% in 2021, as pandemic-era lockdown restrictions eased and consumers returned to brick-and-mortar stores in greater numbers .
However, the stock has been trading incredibly well lately, rising in seven of the past nine trading sessions, despite broader market volatility.
Despite concerns about impending antitrust reform – the US House Judiciary Committee plans to vote this week on a package of six antitrust laws targeting Big Tech's market power – AMZN shares this week look like a safe bet, as investors move back into technical names at the expense of economy-linked stocks, such as , , and .
Stock To Dump: Bank of America
And speaking of finance, Bank shares of America (NYSE:) appears to be under pressure in the coming days as investors worry about the Federal Reserve's negative impact on corporate earnings.
Financial stocks of all shapes and sizes sold off last week after Federal Reserve officials said interest rates will have to rise faster and faster than they previously expected due to the uptrend.
The Fed's aggressive shift unleashed a massive repositioning in global financial markets, including bonds.
U.S. interest rates rose to 1.59% after the Fed's update, but fell to around 1.44% on Friday afternoon amid concerns about future economic growth prospects.
Lower interest rates are detrimental to the return on interest banks earn from their loan products, or the net interest margin – the difference between the interest income generated by banks and the amount of interest paid to their depositors.
Given the heavy repositioning in the bond market, BAC stock appears to be a vulnerable investment in the short term.
Bank of America Daily Chart
Bank of America has reaped the benefits of a recovering economy, robust investment banking operations and reduced credit loss exposure for much of this year.
However, after rallying to its best level since March 2008 at $43.49 on June 3, BAC stock has since lost momentum, dropping about 11% to close at $38.78 on Friday.
Despite recent losses, shares of the Charlotte, North Carolina-based lender are up 28% in 2021.
At current levels, BofA has a market cap of approximately $332.3 billion, making it the second largest US banking institution after JPMorgan Chase (NYSE:).
