Jan. 28 (UPI) — U.S. markets rebounded Thursday as brokerage firms took steps to restrict an influx of transactions on heavily shorted stocks.
The Dow Jones Industrial Average gained 300.19 points, or 0.99%, while the S&P 500 climbed 0.98% and the Nasdaq Composite increased 0.50% after the stock trading app Robinhood restricted trades involving GameStop, AMC, Blackberry, and Nokia.
All four stocks plummeted Thursday. They were popular on Reddit r/WallStreetBets, where users banded together to drive up prices of such stocks despite traditional hedge funds that had shorted them.
AMC fell 56.63%, GameStop dropped 44.29%, Blackberry fell 41.63% and Nokia slipped 28.4%.
Robinhood said it restricted trading in the stocks “in light of recent volatility” and also updated its instructional tools to help people “educate themselves, including how to make sense of a volatile market.”
Sen. Sherrod Brown, the incoming chair of the Senate banking committee announced he would hold a hearing on “the current state of the stock market.”
“People on Wall Street only care about the rules when they’re the ones getting hurt,” Brown, D-Ohio, said. “It’s time for SEC and Congress to make the economy work for everyone.”
Thursday’s rebound also came as American Airlines gained 9.3%, Disney increased 5.55% and American Express grew 4.3%.
Thursday’s gains came after the Dow recorded its worst day since late October and the S&P erased its gains and fell negative for the year following concerns from investors over the r/WallStreetBets stocks and a negative outlook from the Federal Reserve.
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