Stock Market Today: Markets Tumble, But 'Reddit Stocks' Story Isn't Over
The major indices delivered significant losses Wednesday; spared were stocks such as GameStop and AMC, which soared amid a push from a corner of the internet.


Today, let's start with the elephant in the news feed: GameStop (GME) and a number of other momentum stocks commanded most of Wall Street's attention on Wednesday even as the major indices took a considerable skid.
If you need to catch up on exactly what's been happening, check out our primer on this sudden battle between hedge funds and traders from the social app Reddit. (In short, individual traders are flooding into heavily bet-against stocks to make them explode higher.)
GameStop shares surged another 134.8% on Wednesday to bring their year-to-date gains to roughly 1,730%, while theatre chain AMC Entertainment (AMC) jumped 301.2% in a single day. Nokia (NOK, +40.2%), BlackBerry (BB, +32.7%) and Bed Bath & Beyond (BBBY, +43.5%) were among others that were ginned up.

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The movement in GME and AMC specifically was so wild that TD Ameritrade and Schwab restricted certain trades in those shares. And in fact, White House press secretary Jen Psaki admitted that Secretary Janet Yellen was "monitoring the situation" with GME and some of these other stocks.
Most of the rest of the market? Not so lucky.
The Dow Jones Industrial Average (-2.1% to 30,303), S&P 500 (-2.6% to 3,750) and Nasdaq Composite (-2.6% to 13,270) all finished well off their recent highs, dogged by losses from the likes of Boeing (BA, -4.0%), Alphabet (GOOGL, -4.7%) and Disney (DIS, -4.0%).
Other action in the stock market today.
- The Russell 2000 plunged 1.9% to 2,108.
- Gold futures fell yet again, declining 0.2% to $1,844.90 per ounce.
- U.S. crude oil futures improved by 0.5% to $52.85 per barrel.
- Bitcoin prices, at $31,981 on Tuesday, edged 0.1% lower to $31,629. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
What's Weighing on the Markets?
The Federal Reserve left its benchmark interest rate near zero, though "(Fed Chair Jerome) Powell reiterated the Fed's accommodative policy stance and pointed out that the economy is still in the early stages of recovery," says Charlie Ripley, Senior Investment Strategist for Allianz Investment Management. "Moreover, the committee acknowledged that downside risks still remain as the progress on vaccinations could determine the pace of the recovery in the coming months."
The continued spread of mutant COVID strains worldwide is a constant reminder of what the economy needs to overcome, too.
But the problem might also be technical in nature.
"Some areas of the market are now very extended / overbought on the charts – this leaves them vulnerable to quick and violent pullbacks over the short-run," says Dan Wantrobski, technical strategist and associate director of research at Janney Montgomery Scott, who adds that "broader market breadth has started to deteriorate – this is a notable divergence and serves as a mild warning that we may see more elevated volatility ahead."
At the moment, it's difficult to tell whether this is a big blip, or the start of a deeper short-term trench that some analysts have been calling for.
Buy-and-holders: Keep watching the show. Opportunists: Many of these value stocks went on sale today. Those seeking safety: You'll often find it in yield-friendly equity sectors such as consumer staples and utilities, or fixed-income funds.
No matter which direction you turn, low-cost ETFs are the tool to reach for – take your pick from the best ETFs for 2021. Whether you want to use this dip to build your core or jump into aggressive positions or protect yourself against additional downside, this "Swiss Army list" of funds has something for everyone.
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Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.
Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.
You can check out his thoughts on the markets (and more) at @KyleWoodley.
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