Opinion: Algorithmic and programmatic selling triggered a sharp decline in U.S. equities, with market liquidity at the open exhibiting “strong liquidation characteristics.”

Over the past night and early morning (November 6), U.S. equities faced intense selling pressure, with market sentiment turning sharply bearish. Wall Street traders widely attribute the day’s heightened volatility to algorithmic trading and systematic sell orders. Goldman Sachs’ equity trading desk labeled the selloff “extremely painful”; its top trader John Flood added that long-biased institutions have once again fallen into a passive stalemate, while hedge funds—having aggressively built cloud-computing-related positions during Wednesday’s rebound—are now rapidly unwinding those positions. “We have yet to observe any meaningful buying support,” he noted. Several veteran traders described liquidity conditions at the U.S. market open as exhibiting “a pronounced pattern of concentrated liquidation,” emphasizing that algorithmic trading systems and CTA funds’ programmed selling directly drove the index’s near-vertical decline—especially amid a complete absence of buyers. According to Vanda Research, retail investors’ net selling volume in the first 30 minutes after Thursday’s market open hit a multi-month high for a half-hour window, approaching the peak levels seen during retail panic-driven exits at the end of July 2024.