Stock market news live updates: Stocks jump as GameStop craters, retail rally unwinds

The major stock indexes rose Tuesday, while shares of retail traders’ top stock picks including GameStop unwound some recent gains.

[Click here to read what’s moving markets heading into Wednesday, Feb. 3]

The Dow added about 600 points, or 2%, at session highs, while both the Nasdaq and S&P 500 jumped more than 1.5%.

Silver futures (SI=F) fell more than 6%, after derivatives exchange CME Group increased margins on Comex silver futures by nearly 20%, Bloomberg first reported, in a move that would increase the cash needed to trade the contracts. The commodity’s prices soared on Monday to breach $30 per ounce, touching its highest level in eight years as some online traders pivoted to target silver after last week’s surge in heavily shorted stocks.

Many of the stock picks popularized on Reddit’s r/wallstreetbets forum last week extended Monday’s losses, giving back more of last week’s sharp gains. GameStop (GME) sank more than 40% following a 31% slide on Monday, bringing the stock down below $100 per share at session lows from a peak of $483 last week. AMC (AMC), Express (EXPR) and Koss Corporation (KOSS) also added to losses.

Despite the pullback in these names, some strategists noted that the increased retail participation that made headlines over the past couple weeks may remain in markets.

“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,” RBC Capital Markets strategist Lori Calvasina wrote in a note Tuesday. “The big upward moves in certain small cap stocks are likely temporary in early 2021, but we suspect that retail interest in trading specific names will continue to ebb and flow, just as it has done over the past year.”

“Unless the door closes (i.e., through a major regulatory change), we fail to see why retail investor interest in trading specific names will completely go away given how elevated cash on the sidelines is among consumers. Ultimately, this may be good for active managers by creating more dislocations, even though recent moves have admittedly caused some pain in long-only portfolios in early 2021.”

Others, however, have begun raising concerns over the volatility around a broadening number of stocks, commodities and cryptocurrencies, especially as the ballooning prices appeared detached from traditional measures of asset valuation. Bank of America strategists on Monday drew comparisons between trading today to the dot-com bubble around 2000, which had also been marked by increasing retail participation, rich valuations and euphoria around stocks.

But still others have remained as yet unworried about spillover of the Reddit-fueled trading volatility into the broader stock market.

“So far the good news is unlike, say, 1999 to 2000, the big heightened speculative activity is not in the big major stocks driving the S&P 500. So maybe that’s one saving grace,” Liz Ann Sonders, chief investment strategist for Charles Schwab, told Yahoo Finance. “There’s no question there’s a lot of micro-bubbles. I’m not sure we’re quite yet there in terms of the broader market.”

Some of the larger stocks in the S&P 500 are poised to report quarterly results on Tuesday, including Amazon (AMZN) and Alphabet (GOOGL) after market close.

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4:02 p.m. ET: Dow adds 477 points, or 1.6%, for best session since November as GameStop craters

Here were the main moves in markets as of 4:02 p.m. ET:

• S&P 500 (^GSPC): +52.37 (+1.39%) to 3,826.23

• Dow (^DJI): +476.09 (+1.58%) to 30,688.00

• Nasdaq (^IXIC): +209.38 (+1.56%) to 13,612.78

• Crude (CL=F): +$1.26 (+2.35%) to $54.81 a barrel

• Gold (GC=F): -$27.50 (-1.48%) to $1,836.40 per ounce

• 10-year Treasury (^TNX): +2.8 bps to yield 1.1050%

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1:23 p.m. ET: GameStop frenzy represents just the latest of a string of ‘chaos-driven challenges to establishment institutions’: GeoQuant CEO

The surge and then swoon of GameStop and other heavily shorted stocks is only the latest signal of dissatisfaction with establishment institutions, GeoQuant CEO Mark Rosenberg said, extending a trend that has been seen elsewhere in society including in the political sphere.

“I think the general, kind of chaos-driven challenges to establishment institutions which we’ve seen throughout our political economy – whether it’s in the political arena or now in the markets – is here to stay,” Rosenberg told Yahoo Finance on Tuesday. “How that plays out specifically I think no one can tell, but the idea that how things were, and the expectations [that] established players in these markets will be shaken up by bottom-up internet-driven groups, I think is probably here to stay.”

“The same forces that are driving our whacky and seemingly unpredictable politics of late ... are of a kind with this kind of activity in the market, which is effectively that large segments of the population are losing faith in our traditional institutions,” he added. “They believe certain institutions, whether it’s the political system or the market system, are rigged, and they are increasingly using internet-based tools to take power to try to fight that impression.”

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12:00 p.m. ET: Stocks extend gains, Dow adds 600 points, or 2%

The three major indexes neared session highs around noon on Tuesday, led by a rally in banks and energy stocks. The financial, energy and consumer discretionary sectors led a more than 1.7% gain in the S&P 500. The Dow gained more than 600 points, or 2%, as Disney, Caterpillar and American Express outperformed

Each of the Big Tech “FAANG” names – Facebook, Amazon, Apple, Netflix and Alphabet – advanced strongly ahead of more earnings after market close, and the tech-heavy Nasdaq rallied.

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9:30 a.m. ET: Stocks open higher, heading toward back-to-back sessions of gains

Here were the main moves in markets shortly after the opening bell:

• S&P 500 (^GSPC): +59.62 (+1.61%) to 3,773.86

• Dow (^DJI): +229.29 (+0.76%) to 30,211.91

• Nasdaq (^IXIC): +143.27 (+1.07%) to 13,546.66

• Crude (CL=F): +$1.45 (+2.71%) to $55.00 a barrel

• Gold (GC=F): -$25.40 (-1.36%) to $1,838.5 per ounce

• 10-year Treasury (^TNX): +3.3 bps to yield 1.11%

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8:12 a.m. ET: U.S. crude oil prices briefly touch $55 per barrel for the first time in a year

U.S. West Texas intermediate crude oil prices (CL=F) rose more than 2% Tuesday morning to hit $55 per barrel for the first time in one year, after the coronavirus pandemic decimated demand for travel and fuel in 2020.

Oil prices have rebounded strongly since November, when Pfizer and BioNTech first announced upbeat efficacy data for their COVID-19 vaccine. U.S. crude oil prices are now up about 6% over the past 12 months, and have rallied nearly 13% so far in 2021.

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7:14 a.m. ET Tuesday: Stock futures extend gains ahead of the opening bell

Here’s were markets were trading Tuesday morning:

• S&P 500 futures (ES=F): 3,794.75, up 29 points or 0.77%

• Dow futures (YM=F): 30,339.00, up 229 points or 0.76%

• Nasdaq futures (NQ=F): 13,335.75, up 99.25 points or 0.75%

• Crude (CL=F): +$1.39 (+2.6%) to $54.94 a barrel

• Gold (GC=F): +$16.40 (+0.88%) to $1,847.50 per ounce

• 10-year Treasury (^TNX): +3.3 bps to yield 1.11%

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6:11 p.m. ET Monday: Stock futures point higher

Here’s where markets were trading on Monday evening as overnight trading kicked off:

• S&P 500 futures (ES=F): 3,768.25, up 2.5 points or 0.07%

• Dow futures (YM=F): 30,131.00, up 21 points or 0.07%

• Nasdaq futures (NQ=F): 13,257.75, up 21.25 points or 0.16%

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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