Amazon Falls 4% as Senate China Probe and AI-Spending Jitters Weigh Ahead of Earnings

Amazon shares fell 4% ahead of its Q2 2026 earnings, pressured by two issues: a Senate Small Business Committee probe into alleged Chinese influence on its marketplace, and broader investor worries about the heavy AI infrastructure spending across mega-cap tech. The decline came despite a generally constructive Wall Street setup, with Bank of America reiterating a Buy rating and a $310 target, and consensus expectations for strong AWS and advertising growth. The article argues the selloff is more about sentiment, regulatory overhang, and capex fears than a deterioration in fundamentals. Amazon’s stock also slipped below its 50-day moving average and traded just above its 200-day level, highlighting technical weakness ahead of earnings. Peers like Alphabet and Meta also sold off on AI capex concerns, reinforcing the sector-wide nature of the rotation. Investors will focus on AWS growth, capex commentary, and operating income guidance when Amazon reports next week.