After what was a tumultuous week of trading due to the GameStop short squeeze, U.S. stock indexes made a steady recovery on Tuesday morning. The Dow Jones rose by more than 350 points (approximately 1.2%), while the Nasdaq and S&P 500 indexes added 1% each.
After silver prices skyrocketed to nearly $30 per ounce on Monday, the commodity seems to be slipping back to its regular levels, having declined by 6% on Tuesday.
GameStop, a stock that skyrocketed after being popularized by Reddit forum r/wallstreetbets, sank by more than 40% on Tuesday. This is in addition to the 31% decrease that the video game retailer incurred on Monday. Other major stocks that contributed to losses on Tuesday included AMC (AMC), Express (EXPR), and Koss Corporation (KOSS).
Given the current economic situation, Lori Calvasina of RBC Capital Markets made the following observation: “While there are reasons why retail investor trading has surged suddenly, (zero-commission trading, lockdowns/social distancing, stimulus checks, and colder temperatures) … we believe a structural change may be afoot and that retail investors are likely to remain bigger players in the U.S. equity market going forward.”
Bank of America seemed to agree with this sentiment, going so far as to compare the current trading situation with the dot com bubble around 2000, when trading was heavily affected by a widespread euphoria around stocks.
