Your Evening Briefing: GameStop Madness Continues as Markets Sink
Get caught up.
A GameStop store in San Pablo, California, on Jan. 27. The retailer’s breathtaking ascent showed no sign of slowing Wednesday, with bullish day traders keeping the upper hand over short sellers who started to capitulate.
Photographer: David Paul Morris/BloombergThe Fed had a rate decision Wednesday (they held), but all anyone wants to talk about is the crazy ascent of video game store GameStop. The rise of homebound amateur traders is forcing Wall Street, especially short sellers, to pay attention as established players are squeezed by an army of Reddit bros. Robinhood faced disruptions while TD Ameritrade curbed GameStop trades. Other retail stocks are getting a boost from this effect, like AMC, bankrupt Blockbuster and Tootsie Roll. The White House says it’s monitoring the situation, but there may be bigger, related fish to fry. In a stock market where every day seemed to bring new records, there now seems to be concern that equities are—wait for it—overvalued. The S&P 500 fell by more than 2.5% while the Dow slid by 2%. Could this be GameStop and fear of a “squeeze contagion?” Here’s your markets wrap. —Margaret Sutherlin
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