Rough day for US stock markets as hedge funds blow out

It’s not exactly clear what was behind all the selling in stocks today.

Trump reversed course on USMCA tariffs, though there is some confusion about what’s exempted and what isn’t. You could argue that he’s showing more determination around April 2 tariffs but that’s not exactly new.

There was a brief bounce what Lutnick floated the tariff removal and said it was ‘likely’ today but an hour later heavy selling followed. A hint of who was behind it comes in the composition of the losers. Hedge fund favorites like Vistra, Netflix, Constellation, GE Vernova and Broadcom were among the biggest losers. That hints at deleveraging as the major catalyst, perhaps as funds look to play defense or shift funds to hot Europe/China trades.

You could also argue that comments from Trump/Bessent about short-term pain in markets are resonating. In any case, it was a rough one that saw fresh closing lows since the election or earlier:

• S&P 500 -1.8%
• Nasdaq Comp -2.6%
• DJIA -1.0%
• Russell 2000 -1.5%
• Toronto TSX Comp -1.0%

Today’s drop marks a 10% decline in the Nasdaq from the highs, which is an unofficial ‘correction’.

This article was written by Adam Button at www.forexlive.com.