Hedge Fund Liquidations May Accelerate U.S. Stock Market Decline

U.S. stocks plummeted yesterday, with the Nasdaq 100 index recording its largest single-day drop since the pandemic began in 2020, and the S&P 500 index losing $300 billion in market value. Analysts point out that one of the reasons for the accelerated market decline is the collective liquidation of several hedge funds. Hedge fund Walleye Capital, with assets under management exceeding $17 billion, reported a 5.9% loss in October and plans to return some cash to reduce its internal equity business scale. Sources reveal that Walleye Capital's head of equity investments, Anil Gondi, has agreed to part ways with some members of the equity team, focusing in the future on core strategies such as volatility, quantitative strategies, and external business. Additionally, market rumors suggest that hedge fund Millennium has withdrawn over $1.5 billion in leveraged capital from two external fund managers, while another hedge fund, Lone Pine, is facing bankruptcy rumors, which have yet to be confirmed.

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