Lucas Jackson/Reuters
- US stocks gained on Monday, staging a rebound after its worst week since October.
- Last week’s volatility was sparked by a number of short squeezes driven by Reddit traders.
- A 10% surge in silver on Monday is thought to have been sparked by the Reddit short squeezes.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
US stocks gained on Monday, staging a rebound from its worst week since October, which saw a decline of about 3%.
Last week’s volatility was driven by a number of short-squeezes in stocks that had been targeted by traders coordinating on Reddit’s WallStreetBets forum.
The epic surge in GameStop and AMC Entertainment led to hedge funds dumping their stock exposure at the fastest rate since 2009, according to a note from Goldman Sachs, which likely contributed to last week’s decline in stocks.
Here’s where US indexes stood after the 9:30 a.m. ET open on Monday:
- S&P 500: 3,753.94, up 1.07%
- Dow Jones industrial average: 30,223.06, up 0.80% (240.44 points)
- Nasdaq composite: 13,242.08, up 1.31%
The Reddit trading phenomenon doesn't seem to be over just yet. Silver spiked more than 10% on Monday after the commodity made the rounds on social media as a potential short-squeeze play that could hurt big banks, but not all were convinced as many argued that it could dent the current strength in shares of GameStop.
And famed investor Michael Burry of 'The Big Short' has advice to investors who benefitted from the epic rally in GameStop: sell.
"Hey, $GME is now a $stonk and may go >$1000, but if I made a life-altering amount in this stock, I'd punch out," Burry tweeted.
Restrictions are still in place for certain stocks on the popular Robinhood brokerage platform. Eight stocks remain on Robinhood's restricted buy list, including GameStop, which investors can only buy one share of.
Oil prices rose. West Texas Intermediate crude jumped as much as 0.96%, to $52.70 per barrel. Brent crude, oil's international benchmark, gained 1.13%, to $55.68 per barrel, at intraday highs.
Gold rose 0.94%, to $1,864.70 per ounce.