What sparked Wall Street’s crazy sell-off? | CNN Business
cnn1 min read5 reads
A stunning $2.5 trillion was wiped off the value of the tech-heavy Nasdaq on Thursday as investors rushed to dump tech stocks, rattled by fears that Democrats’ midterm victories could slow the AI buildout. But another force made the sell-off more brutal: Investors who had borrowed heavily to bet on the boom were under pressure to sell.
Televisions broadcast market news at the Nasdaq MarketSite in New York, on Thursday.
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A stunning $2.5 trillion was wiped off the value of the tech-heavy Nasdaq on Thursday as investors rushed to dump tech stocks, rattled by fears that Democrats’ midterm victories could slow the AI buildout. But another force made the sell-off more brutal: Investors who had borrowed heavily to bet on the boom were under pressure to sell.
Hedge funds and other investors who borrow to make bigger bets may have to sell more stocks to cover losses and meet demands for cash, which can deepen a sell-off.
