Here are today’s market moves:
S&P 500 down 2.57% to 3,750.77
Dow Jones down 2.05% to 30,303.17
Nasdaq down 2.61% to 13,270.60
Gold: $1,843.70
Bitcoin: $30,628
US10Y: 1.023%
What Happened?
Stock indexes fell on Wednesday, suffering their biggest one day declines since October amid worries about the distribution of Covid-19 vaccines and bubbles forming in parts of the stock market.
The Federal Reserve said it would maintain its current monetary policies, saying “the pandemic still provides considerable downside risk.”
On Wednesday, GameStop shares soared to a high of $380, momentarily giving the videogame retailer a $26.5 billion market capitalization. The shares are up a stunning 1900% since the start of 2021.
AMC Entertainment shares were up 300% after the movie-theater chain said it had raised money in debt and equity to be able to survive during the pandemic.
The unprecedented swings in individual stocks come as individual investor trading activity has surged during the coronavirus pandemic, attracting novice and seasoned investors.
So far this year, traditional strategies such as evaluating company fundamentals has gone out of fashion in favor of momentum.
Groups of traders on Reddit and TikTok have been battling with hedge-fund short sellers on stocks such as GameStop, AMC, and Blackberry – so far with success.
New strains of Covid-19 are emerging across the globe, putting new pressure on governments to vaccinate their populations.
What Else?
This Week
Monday: Earnings expected from Kimberly-Clark.
Tuesday: Earnings expected from 3M, General Electric, Microsoft, Starbucks, Verizon, and Texas Instruments; Data on U.S. home prices and consumer confidence.
Wednesday: Earnings expected from Apple, Facebook, and Tesla; FOMC monetary policy decision and briefing by Chair Jerome Powell.
Thursday: Weekly jobless claims and fourth-quarter GDP released; Earnings expected from Altria, Mastercard, McDonald’s, and Visa.
Friday: Earnings expected from Chevron, Caterpillar, and SAP.