US stocks extend gains after GameStop reversal continues

Summary

  • The US stocks jumped on Tuesday after a sharp reversal in GameStop’s stock value continued. 
  • While the Dow Jones closed higher by 475.57 points or 1.57 per cent at 30,687.48, the S&P 500 settled at 3,826.31, up 52.45 points, or 1.39 per cent. NASDAQ Composite ended at 13,612.78, up 1.56 per cent. 
  • The GameStop stock fell another 50 per cent on Tuesday, easing the mania around speculative trading.

Extending gains to the second straight day, the US stocks jumped on Tuesday after a sharp reversal in GameStop’s stock value continued. The mania around speculative retail trading continued to ease in the market after the video game stock fell 30 per cent on Monday and declined another 50 per cent on Tuesday. 

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This dip has erased gains from the past week, but the share is still up nearly 500 per cent for the year. Similarly, AMC Entertainment fell over 35 per cent. Even the talks around stimulus package and pick up in rollout of the coronavirus vaccine boosted the sentiments.

Silver dips

On the other hand, silver futures declined over 11 per cent on Tuesday, posting their biggest fall since August 2020. On Monday, the futures contracts for silver recorded their biggest climb in 11 years after small-time traders turned their focus on silver amid speculative retail trading frenzy on Wall Street. The investors are also awaiting the quarterly earnings from technology giants Amazon and Google’s parent Alphabet, which are scheduled after the market hours.

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While the Dow Jones Industrial Average closed higher by 475.57 points or 1.57 per cent at 30,687.48, the S&P 500 settled at 3,826.31, up 52.45 points, or 1.39 per cent. The tech-heavy NASDAQ Composite ended at 13,612.78, up 209.38 points, or 1.56 per cent. 

Global markets

The global shares also rallied. While the Stoxx Europe 600 jumped 1.3 per cent, China’s Shanghai Composite Index advanced 0.8 per cent. Hong Kong’s Hang Seng rose 1.2 per cent and India’s S&P BSE Sensex index surged 2.5 per cent.

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The bond yields on 10-year treasury surged to 1.119 per cent, as against 1.077 per cent on Monday. Brent-crude futures advanced to US$57.76 a barrel.

Meanwhile, investors will be closely following stimulus negotiations in Washington, D.C., after US President Joe Biden received a letter on Sunday from a group of 10 Republican senators, urging him to consider a scaled-down coronavirus relief proposal. The current plan proposes US$1.9 trillion in additional fiscal stimulus.

READ MORE: How ASX200 Performed on February 2, 2021?

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