As investors rushed out of US technology stocks on Thursday, selling by trend-following systematic strategies amplified what quickly became a record plunge by market value in the Nasdaq 100 index.
The sell-off wiped roughly $2.3 trillion from the market value of the index's constituents in a single session. Systematic funds, which rely on price momentum and automated rules rather than fundamental analysis, were among the largest sellers as prices fell through key technical levels. Their mechanical selling triggered further declines, creating a feedback loop that pushed shares lower.
Traders described the session as one of the most intense in recent memory for the technology sector. Heavily weighted megacap names bore the brunt of the decline, dragging the benchmark index to levels not seen in years. Volume surged as participants scrambled to reduce exposure, and volatility gauges climbed sharply.
Market strategists said the episode highlighted how quickly momentum-driven positioning can magnify moves in crowded trades. Many expected some stabilization once selling pressure eased, though they cautioned that the speed of the decline had left investors reassessing risk across the sector.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing