US stocks suffer worst week since October amid Reddit-fueled trading craze

US stocks suffer worst week since October amid Reddit-fueled trading craze

US stocks capped their worst week since October on Friday as Reddit day traders continued to furiously attack shorts and drive massive volatility. GameStop, AMC, and other Reddit-favorite stocks soared as day traders piled back into their risky positions. The highly volatile names enjoyed strong buying throughout the week. Moves by Robinhood, Interactive Brokers, and other platforms to restrict trading temporarily cut into gains before rallies on Friday pared losses. Market participants fear that the retail traders' targeting of shorts could force hedge funds to cover their bearish bets by selling their long positions. While the phenomenon has rocked only some funds, strategists have raised concerns about a growing market disruption. Here's where US indexes stood at the 4 p. m. ET close on Friday: "Chasing the squeeze is like buying a lottery ticket. You might profit, but you might also lose everything," said Lindsey Bell, the chief investment strategist at Ally Invest. "This type of speculative trading is more about luck and less about skill." The Securities and Exchange Commission said Friday that it was monitoring recent market volatility for signs of wrongdoing. Stocks' wild price swings risk exposing investors to "rapid and severe losses" and undermining overall confidence,