US stock sell-off wipes out $3.7T as forced selling builds

U.S. stocks have lost approximately $3.7 trillion in market value during Thursday’s sell-off, as retail selling spread to hedge funds and asset managers before automated trading strategies deepened the losses. Summary Retail investors’ net selling ranked behind only two sessions during the March 2020 pandemic shock. Nomura estimated $7 billion in potential dealer selling for each further 1% market decline. Volatility-control funds faced an estimated $61 billion reduction in stock exposure as market turbulence grew. Goldman Sachs estimated technology-focused hedge funds lost more than 4% during Thursday’s trading session. According to Bloomberg’s Nov. 6 account, Wall Street took roughly 24 hours to reverse its initial welcome of the U.S. midterm election results. Investors first bought stocks as election uncertainty cleared and oil prices fell, before reassessing what Democratic control of Congress could mean for data center expansion. The report described a succession of sellers entering the market, with individual investors moving first and professional funds following. As prices fell and volatility climbed, strategies tied to market movements faced pressure to cut their holdings....