Stock markets closed with significant losses on Wednesday, even as the Federal Reserve kept interests blocked at almost zero amid unusual trading activities fueled by amateur online investors.
The Dow Jones Industrial Average lost 635 points, or 2.1 percent, its biggest drop in the past three months, while the S&P 500 erased its gains for the year, falling 98.8 points, or 2.6 percent.
The falls were not stopped by Federal Reserve Chairman Jerome Powell, who supported additional fiscal support and dismissed concerns that this would lead to increased inflation.
President Biden is promoting a $ 1.9 trillion COVID-19 aid package.
But markets, which have been growing steadily since the original shock of the pandemic at the beginning of last year, have slowed amid an unusual phenomenon of amateur investors targeting certain stocks and raising their ratings, upsetting short sellers.
Companies like GameStop have seen their ratings rise and fall at extraordinary rates as online investment boards on sites like Reddit target them. GameStop’s value has increased sixfold since the beginning of the year. The main hedge funds that bet on falling stocks were cornered and probably accumulated significant losses.