What Did the Stock Market Do Today? 3 Big Stories to Catch Up On.

Boy, what a rough day in the stock market. The S&P 500 closed lower by 2.45%, while the Dow Jones Industrial Average ended down 1.75%. The tech-heavy Nasdaq Composite shed 3.52% in Thursday trading. So what did the stock market do today? Dive in below with these three top stories.

Street sign for Wall Street pictured in front of several American flags representing american stocks

Source: Shutterstock

To start, some of the top movers were GameStop (NYSE:GME), AMC Entertainment (NYSE:AMC) and Koss Corporation (NASDAQ:KOSS), continuing on a narrative from this morning. Also joining the Reddit stocks at the top were names like Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA), with both stocks plunging.

So what is the story behind these top movers? And what else do you need to know? Follow along for the ins and outs of the Reddit rally, Dogecoin (CCC:DOGE) drama and a spike in volatility.

What Did the Stock Market Do Today? Spike Volatility.

One of the top questions in the stock market today was simply why stocks are down.

The answer to that question is not so simple. As we wrote today, it all starts with fears of inflation, and the fact that headline consumer prices figures are set to increase in 2021. According to UBS Chief Economist Paul Donovan, this is because of oil prices and changing consumer spending patterns. Essentially, with Covid-19 statistics improving and jobless numbers dropping, a reopening rally seems closer than ever before. When it is safe for us all to go out and spend, certain services will be in demand due to pent-up demand. And while we sort out supply and demand for those services, we could see a near-term spike in inflation.

That is worrying to many investors, and is followed by an increase in yields on the 10-year U.S. Treasury note. This week we saw that yield increase from 1% to 1.5%.

Then, just like history tells us, that yield increase brought stocks tumbling. Inflation rates and interest rates are particularly influential on stocks with long-term growth narratives. That means tech equities like Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) are struggling. It also means that investors are eyeing commodities.

One other story? The CBOE Volatility Index (VIX). Today, the so-called fear index spiked 35% to a reading just below 29. Gains in the VIX tend to give investors a bad taste in their mouth. However, Joanna Ossinger wrote for Bloomberg that this could actually be a good sign. Based on historical trends, we should see the VIX start to turn back south. When it does, stocks should rally.

Keep calm then, and try not to fret the inflation story.

Musk, Dogecoin and the SEC

What a saga. Elon Musk is a man that loves stirring up trouble, and he also loves flexing his stock market muscles. Over the past few weeks, his passions have combined, resulting in a series of Dogecoin memes and a few major rallies in DOGE. Just yesterday, his latest meme of the signature Shiba Inu on the move sent DOGE higher by 20%. However, it backfired in a big way on Thursday.

As Zero Hedge first reported, the U.S. Securities and Exchange Commission is allegedly investigating Musk for his Dogecoin tweets. While it is unclear what grounds they have for such an investigation, the rumors bring up a few points. Musk has been in trouble with regulators before for his tweets about Tesla. His tweets have also clearly had an impact on the DOGE price. Lastly, he has said that he purchased some of the meme cryptocurrency for his son, who goes by Lil X.

So what should you do with this news? In response to the rumors, Musk said “I hope they do! It would be awesome.” Translated, it seems Musk is not rattled by the news.

Right now, it is clear that social media and retail investors are developing new roles when it comes to moving the stock market. Along with that, celebrities like Musk, Gene Simmons and Kevin Jonas are gaining more influence. A simple tweet or meme can cause a huge rally and convince the crowd. However, there are also real catalysts supporting cryptocurrencies. Just today, investors started to process the news that the Federal Reserve is making progress on a digital dollar.

Keep Dogecoin, Bitcoin (CCC:BTC) and Musk’s Twitter on your radar. It will surely come in handy.

Is the Rocket Crashing for Reddit Stocks?

Earlier this morning, it seemed that r/WallStreetBets could do anything. While the enthusiasm has certainly returned to Reddit stocks, the story started to cool off on Thursday afternoon. After gaining 100% in pre-market trading, GameStop only closed higher by 20%. AMC and BlackBerry (NYSE:BB), another high-flying name, erased their gains and ended the day in the red.

Maybe this week is not the redemption story for Reddit stocks. However, it is further proof that r/WallStreetBets is not forever stuck on the sidelines. As of the time of writing, the subreddit had 9.3 million members. Legendary investors like Mark Cuban continue to sing the praises of retail investors. Short squeeze potential is looming on the horizon, and short-selling hedge funds still earn ire from Redditors.

Whether GME rockets higher tomorrow or goes back to double-digit levels, make sure this theme is top of mind.

On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Sarah Smith is a Web Content Producer with InvestorPlace.com. 

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