Post-Election Nasdaq Rout Raises Risk of Forced Selling Across Markets

U.S. stocks’ post-election plunge has raised concern that forced fund selling could extend declines across risk assets, including crypto, if mounting losses prompt risk controls.

The Nasdaq 100 fell 6.4% Thursday, its biggest one-day decline since 2020, erasing about $2.3 trillion in market value. The selloff also hit Asian equities, where a regional benchmark dropped nearly 4%; declines in Britain and Europe were smaller.

Investors worried that Democratic gains in the midterm elections and public opposition to data center expansion could slow AI development. Crowded positioning, systematic strategies and concentrated hedge-fund bets unwinding may also have accelerated the decline.

Bruno Schneller of Erlen Capital Management warned that risk managers may compel funds to cut exposure as losses grow, potentially adding another wave of selling regardless of fundamentals. In credit markets, ING is seeking a one-time sale of a data center loan portfolio worth about $500 million.

U.S. stock futures and some AI-linked shares rebounded in Friday premarket trading. Nvidia rose 4.3%, while AMD gained 8.3%, offering a partial recovery after Thursday’s rout.