I saw a headline earlier this week stating that the Dow Jones index was on track for its worst monthly percentage loss since the Great Depression in 1932. Of course, there are still some trading days left in the month, so we’ll have to wait and see how the history books are written. But with the US stock markets down heavily so far this year, here’s what’s on my radar for potential cheap purchases.

Trade war easing speculation

Amazon (NASDAQ:AMZN) has fallen 24% so far this year and is down 3% over a broader one-year period. The share price has declined due to escalating concerns over the US/China trade war and its implications.

Around 30% of Amazon’s gross merchandise value comes from Chinese products. So if the President pushes ahead with implementing large import levies on China, it would really hurt profit margins for the company. Although this is a risk going forward, I don’t feel that this trade war will keep going. It’s in both countries’ interests to make a deal, rather than hike tariffs higher and higher.

Therefore, if tensions calm down in the coming months, Amazon stock could rally back due to improved sentiment.

Another factor that makes me quietly confident is that about 60% of the profit is generated by Amazon Web Services (AWS). This part of the business is less exposed to trade tensions, as it provides services rather than goods. This area generates stable and growing revenue, something that appeals to a potential investor.

An AI-value play

Another stock I’m watching is Adobe (NASDAQ:ADBE). The share price has been caught up in the rout over the past month, losing 9%. This means it’s now down 26% in the past year.

I think the stock is attractive from a valuation perspective. Its current price-to-earnings ratio is 23. Even though this might seem high to UK investors, it’s low when I compare it to peers. For example, Intuit has a ratio of 51.6, with Cadence Design at 63.7.

Aside from valuation, I like what the company is doing by embracing AI. The company has embedded generative AI capabilities into flagship products like Photoshop and Acrobat. Interestingly, it reported in fiscal Q1 2025 earnings that AI-driven products contributed $125m in annual recurring revenue (ARR). Even though this isn’t a game changer, CEO Shantanu Narayen expects to double this figure by the end of the year. This highlights the pace of growth as well as the company’s commitment to monetising its AI investments.

Regarding risks, I’d flag the signs of subscription growth stagnating in its more traditional products. It needs to ensure new innovations come through; otherwise, revenue growth could be capped.

Both stocks are on my watchlist and I’m very likely to buy both within the next month.