The Dow has its biggest loss since October

At least one big bank is instructing its financial advisers to steer clear of making recommendations on GameStop and AMC amid the insane swings in those stocks, CNN Business has learned.

Wells Fargo banned its advisers from contacting clients to tell them to buy or sell GameStop (GME) and AMC (AMC).

"As of today, Wells Fargo Advisors is not allowing solicitation of those two securities," a spokesperson said in a statement.

The decision was driven by the extreme volatility in GameStop and AMC, whose shares have skyrocketed after getting heavily promoted by Reddit's Wall Street Bets community.

Wells Fargo's clients can still call their advisers to initiate trades in those stocks, though. The decision only means that Wells Fargo's 13,000 advisers cannot make recommendations about those two stocks.

It's not clear how many other big banks are taking similar steps.

Representatives for Bank of America, Citigroup, JPMorgan and UBS did not immediately respond to requests for comment.

US stocks fell sharply after the Federal Reserve said the economic recovery and job market have “moderated” due to the pandemic.

The Dow suffered its biggest loss since October, dragged down by weak results from Boeing (BA). Both the Dow and S&P 500 are now down year-to-date.

But GameStop (GME) and AMC (AMC), two stocks currently hot with the Reddit/Robinhood crowd, continued to surge as bulls are squeezing short sellers.

 As stocks settle after the trading day, levels might still change slightly.

Senator Elizabeth Warren is neither shocked nor saddened by the Wall Street firms getting run over by Reddit-fueled trades in GameStop and AMC.

"For years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino while everyone else pays the price," the Massachusetts Democrat said in a statement Thursday.

A group of Reddit users have targeted GameStop (GME), AMC (AMC) and other stocks that are heavily bet against by short sellers. They have successfully sent the stocks skyrocketing -- despite a lack of major fundamental news. And that has caused massive losses for some hedge funds and other market players.

"It's not news that the stock market doesn't reflect our actual economy," Warren said.

The Democrat, who is the ranking member on the Senate subcommittee on financial institutions and consumer protection, used the incident to renew her call for a crackdown on Wall Street.

"It's long past time for the SEC and other financial regulators to wake up and do their jobs," Warren said, "and with a new administration and Democrats running Congress, I intend to make sure they do."

We all want this pandemic to end. But the normally reserved Federal Reserve Chairman Jerome Powell got all fired up at the end of his otherwise dry press conference Wednesday.

His message: Solve the damn vaccination problem.

"There's been a lot of adapting -- but you can't adapt hotels, sporting venues, movie theaters, restaurants, bars. That's millions and millions of people," Powell said. (He added that he has had the first shot, but not the second, btw).

"And so you're just going to have to defeat the pandemic, which as I mentioned, we have a plan to do that but we haven't done it yet. We need to finish the job. It's within our power to do that as a country this year. I would just urge that -- I know people are working hard on that -- but that is really the main thing about the economy is getting the pandemic under control, getting everyone vaccinated, getting people wearing masks and all that.

"That's the single most important economic growth policy that we can have."

'Nuff said.

Federal Reserve Chair Jerome Powell said the future is uncertain as the economic recovery is growing weaker.

That's not exactly music to investors' ears.

"The economic dislocation has abandoned many lives and created great uncertainty about the future," Powell said. "Something like 9 million people remain unemployed as a consequence of the pandemic. That's as many people lost their jobs at the peak of the global financial crisis in the great recession. Many small businesses are under pressure and other needs to be addressed and the path ahead is still uncertain."

All that talk of uncertainty sent stocks — which were already down a bunch — even lower.

With 30 minutes left to trade, the Dow was down 640 points, or 2%. The S&P 500 fell 2.7% and the Nasdaq was 2.9% lower.

Technically, if the Fed wanted to weigh in on the GameStop saga, it could. But Fed Chair Jerome Powell said the Fed's not considering that right now.

Under a provision called Regulation T, the Fed can set the rules brokerage firms like Robinhood and TD Ameritrade have for their customers. For example, the Fed could mandate that investors pay for stocks with cash rather than borrowed money -- a step Robinhood took for GameStop and AMC today.

But Powell ruled that out.

"Remember, we're focused on maximum employment, price stability, financial stability of, as I defined it, the broad financial sector," said Powell. "Over the years we consult the fact we have that authority, but it's not something we're looking at right now at all."

The White House is monitoring the GameStop price spike, according to Press Secretary Jen Psaki, but Fed Chair Jerome Powell says he doesn't want to get into it. The Fed doesn't have jurisdiction, he said.

But that didn't stop him from speculating about why stocks have risen -- even as he said he wouldn't comment on individual stock prices.

"There are many things that go in, as you know, to setting asset prices," Powell said. "If you look at what's really been driving asset prices in the last couple of months, it isn't monetary policy. It's expectations about vaccines and also fiscal policy."

Powell said he knows people believe the Fed sends stocks up or down, but he doesn't believe that's the case in the long run.

The Federal Reserve left interest rates unchanged Wednesday and again stressed it would use its "full range of tools" to support the US economy during the recovery, which has slowed in recent months.

Rising Covid-19 infections are weighing on the economy, which still remains far from its pre-pandemic strength. Renewed shutdowns in various states have again hit sectors, such as leisure and hospitality, most affected by the initial lockdowns last spring.

Meanwhile, the multi-month improvements in the labor market have turned sour: In December, the US economy lost 140,000 jobs.

"The path of the economy will depend significantly on the course of the virus, including progress on vaccinations," the central bank said in a statement.

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Robinhood is imposing restrictions on trading of GameStop and AMC after a mob of Reddit users sent the companies' shares to the moon.

Robinhood, the free trading app that caters to millennials, has raised its margin requirements on both GameStop (GME) and AMC (AMC) to 100%. That applies to both the initial margin requirement and maintenance.

Margin accounts at brokerage firms allow investors to buy stocks (and other securities) with borrowed money. However, brokers must require investors to maintain a minimum amount of equity as long as they hold onto the stock. FINRA requires a 25% minimum maintenance margin. If the equity dips below that level, investors face a "margin call" that requires them to deposit more funds or securities.

The fact that Robinhood has now increased that threshold to 100% signals the brokerage app is concerned about the extreme volatility in GameStop and elsewhere.

"They don't want to take a hit if the stock goes from $300 to $50 in a minute -- which is possible," said Joe Saluzzi, co-head of trading at Themis Trading.

Robinhood's maintenance margin requirement is just 25% for less volatile stocks such as ExxonMobil (XOM) and Bank of America (BAC).