Stocks set to open in the red
U.S. stock futures are pointing to a lower open on Friday after the Dow Jones Industrial Average rallied 300.19 points, or 0.99%, to close at 30,603.36 in the previous session.
The Nasdaq Composite jumped 66.56 points, or 0.50% to close at 13,337.16 while the S&P 500 gained 36.61 points, or 0.98%, to end at 3,787.38.
By 5:30 a.m. ET, futures tied to the Dow plunged 283 points, or 0.93% to 30,224. Those for the S&P 500 were down 41.13 points, or 1.09% to 3,738.12 while the Nasdaq 100 futures dropped 195.62 points, or 1.48% to 12,990.38.
Reddit-fueled short squeeze continues
Meanwhile, the speculative buying frenzy in stocks with high short interest is expected to continue on Friday.
These stocks have been trading in unusually high prices this week, thanks to an investing frenzy fueled by a horde of retail traders at Reddit’s WallStreetBets forum.
Robinhood raises $1 billion from existing investors
Robinhood has received an additional $1 billion in cash from its backers to help it clear trades and to shield its trading partners from losses amid the surge in demand from the ongoing speculative frenzy in the stock market.
According to the New York Times, the commission-free trading app “drew on credit lines of between $500 million to $600 million to meet lending requirements and separately raised $1 billion in emergency funding to avoid having to place further limits on trades.”
Earlier on Thursday, Robinhood restricted buying of 13 high-flying stocks including GameStop and AMC. But the app later said it will allow “limited buys” of those stocks.
Dogecoin joins Reddit-inspired rally
Dogecoin is also soaring, helped by Reddit traders who are committed to sending its value above $1. The cryptocurrency, which started out as a joke based on the Shiba Inu meme in 2013, briefly soared over 800% overnight.
As of this writing, the price of the digital asset had moderated down but was still up more than 369% with a value of $0.05223, according to CoinDesk data.