Memes may have just sent Wall Street into its worst spiral in months.
Despite the general disorder of the world right now, the stock market managed to pull out record highs over the past few months. But that all changed this week as concern about coronavirus vaccine rollouts and the rise of an unlikely stock sent markets tumbling, The New York Times reports.
Reddit users collaborated this week to buy massive amounts of stock in GameStop, as well as some other heavily shorted but still beloved brands. The video game retailer's value multiplied by 10 at one point, pretty much dominating all Wall Street talk — and news in general — throughout the second half of the week. GameStop closed out up 400 percent the week, and up 1600 percent this month.
GameStop's success was the rest of Wall Street's loss, as investors fear hedge funds will have to sell off other shares to pay their losses after shorting GameStop. On Friday, the S&P 500 fell 1.9 percent, the Dow Jones Industrial Average meanwhile fell 600 points, or two percent and the Nasdaq Composite fell two percent as well. That put all three major indexes down more than 3 percent this week, leaving the Dow and S&P 500 with their first negative months since October, CNBC notes. The Nasdaq did manage to gain 1.4 percent for the month.
The losses weren't all GameStop's doing, the Times notes. Worldwide shortages of vaccines led investors to sell off airline, cruise line, and shopping mall stocks as they fear the pandemic won't end anytime soon.