Amex Stock Dives 20% from All-Time High Amid Economic Uncertainty
American Express stock has been on a wild ride over the past three years. The credit card company reached an all-time high of $384.79 per share in December 2025, capping off a remarkable run with annual returns of 25% in 2025, 58% in 2024, and 27% in 2023.
However, economic conditions have taken a turn for the worse in 2026, with rising inflation rates and soaring gas prices curtailing travel and consumer spending. As a result, American Express stock has dropped from its December highs, trading at around $310 as of now, that's a 20% decline from its 52-week high.
The company has been experiencing solid revenue growth, up 10% year over year in Q2, but earnings growth has declined slightly. In Q2, earnings rose 11% year over year compared to 18% growth in Q1 and 15% in Q4 2025. A big part of the decline is due to American Express incurring higher expenses, which increased by 12% year over year as the company invested in marketing and technology.
CEO Stephen Squeri attributed this spending to the need for acquiring high revenue-generating cardholders and high-spending cardholders to maintain good revenue growth. Some investors were concerned that while American Express raised its revenue guidance to 10% growth, up from 9% to 10%, it maintained its earnings guidance, leading to worries about higher expenses for the rest of the year.
Another factor contributing to this year's sell-off is American Express' valuation. After three years of huge gains, the stock became expensive, with a price-to-earnings (P/E) ratio of 25 at the end of 2025, its highest since 2021. Now, the P/E ratio has dropped to 18, which might be seen as a signal to buy.
However, with the Fed raising interest rates this week, it presents an interesting conundrum for American Express. Higher rates will mean more net interest income but may also put pressure on consumers due to high gas prices and inflation. Considering these factors, investors may want to wait until after the third-quarter earnings to see where the stock moves and how economic conditions are impacted.