Jan 29, 2021 - Economy & Business

Stock market has worst week since October amid Reddit frenzy

Photo of a phone that has the GameStop logo on it
Photo: Tiffany Hagler-Geard/Bloomberg via Getty Images

Wall Street had its worst week since October as day traders bid up stocks for GameStop, AMC and others that gained popularity on Reddit.

Details: The S&P 500 fell more than 1.9% on Friday. All of the major averages fell more than 3% this week.

Why it matters: The broader market sell-off comes amid historic trading activity in a basket of so-called "meme stocks."

  • GameStop's shares jumped 400% this week and 1,600% this month, while AMC gained 280% this week.
  • Wall Street short-sellers, i.e. those betting these stock prices will fall, suffered losses as high as $19 billion, per the New York Times.

Between the lines: The markets are still near all-time highs, having fully recovered from last year’s coronavirus sell-off.

What to watch: Investors are also increasingly concerned about the coronavirus vaccine rollout as shortages become more apparent around the world.

Go deeper: SEC says it will "closely review" restrictions on Reddit-fueled stocks

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