The Nasdaq Composite closed steeply higher, up 3.7% on Tuesday. The Dow Jones Industrial Average ended only 0.1% higher, and the S&P 500 added 1.4%.
However, investors remain on edge. Whether this reprieve in growth stocks will last, or is merely a relief rally that is only temporary, remains uncertain.
On Wednesday, U.S. stocks opened mixed as tech stocks struggled to hold on Tuesday’s strong gains ahead of key inflation data.
The Dow Futures contract was up 70 points, or 0.2% at 7:05 AM ET (1205 GMT). S&P 500 Futures traded 2 points, or 0.1%, lower. Moreover, Nasdaq 100 Futures lost 35 points, or 0.3%.
Which direction these stocks are going likely depends on fluctuations in U.S. Treasury yields.
The benchmark 10-year yield traded around 1.56%, below Friday’s 1.62% peak. This came after Tuesday’s auction of $58 billion in U.S. 3-year notes was well received.
Furthermore, in the corporate sector, focus will likely be on Tesla. The electric car manufacturer rose 20% on Tuesday, while GameStop continued to be in demand. Activist investor Ryan Cohen shook up GameStop’s online operations.
GameStop Up 11% Premarket
GameStop shares closed at $246.90 on Tuesday. It previously gained nearly 27%. Data showed the scrip to be among the top three traded shares on its platform.
The stock’s recent surge comes in the backdrop of its appointing of a three-member panel. It is headed by Ryan Cohen, board member and co-founder of online pet food retailer Chewy. The panel will spearhead a transition to a digital life and reverse a long-term decline in sales.
On Wednesday, GameStop shares rose 11% at $275 in premarket trade. It is on course for its sixth straight session of gains.
The growth will make it the firm’s stock’s longest streak of daily gains in six months.
A March 8 company filing said, the committee will identify initiatives that can further speed up the company’s transformation.
GameStop, Koss, a maker of headphones, and AMC Entertainment, are scrips known as meme stocks. They tend to attract a lot of millennial retail traders concentrated on forums such as
Worldwide attention was on GameStop in January when a group of Reddit followers, ‘WallStreetBets’ plotted against hedge funds who were heavily short on the stock.
This sent the stock to a high of $482 in February, far above most analysts’ price targets.