E-commerce stocks, with Amazon at the forefront, staged a hot rally Thursday, after a closely watched report indicating that the Federal Reserve's campaign to tame inflation was working. AMZN stock jumped by double digits.
Other e-commerce stocks showing big gains included home-goods e-tailer Wayfair, eBay, Chewy and Etsy.
The jump in e-commerce stocks, and the stock market overall, came after the Bureau of Labor Statistics released its consumer price index report for October, showing that inflation cooled more than expected. The report was a hopeful sign that consumers, hurt by stubbornly persistent price increases, will gain some financial relief.
AMZN stock jumped 12.2% to close at 96.63 on the stock market today.
Wayfair stock soared 28% to 36.80. EBay climbed 10.1% to 44.66. Pet-food retailer Chewy surged 19.9% to 38.34, while arts-and-crafts dealer Etsy leapt 16.1% to 110.21.
E-commerce stocks had rallied during the Covid-19 shutdown as consumers flocked to them for goods as they sheltered at home. But the rally was later deflated as cities unlocked doors and consumers returned to some normalcy as the Covid crisis eased.
Expectations were that the consumer shift to e-commerce during Covid would be permanent. That proved not to be the case. And, as consumers went back to their old ways of shopping, they tightened their wallets as inflation roared its ugly head.
AMZN Stock: More Needs To Be Done
When Amazon reported third-quarter results on Oct. 28, the company indicated more work needed to be done to fix its damaged ship. AMZN stock fell.
"There is obviously a lot happening in the macroeconomic environment, and we'll balance our investments to be more streamlined without compromising our key long-term, strategic bets," Chief Executive Andy Jassy said in a written statement with the earnings report.
Also, the Wall Street Journal reported Thursday that Jassy is leading a cost-cutting review and paring back on businesses that haven't been profitable. As part of the review, Amazon's leadership is closely evaluating its home devices unit, which includes its Alexa smart-speaker business. That unit is reportedly losing about $5 billion a year
The double-digit gain in AMZN stock on Thursday would be its biggest since late July, when it reported second-quarter results that came in better than expected.
On Nov. 2, eBay stock jumped as it reported third-quarter results ahead of expectations. Wayfair stock also jumped when it reported quarterly results on Nov. 2 that beat revenue forecasts. Etsy's third-quarter results also topped views.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
