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U.S. stock prices near level for 'mechanical selling' - Nomura's McElligott

The latest leg lower in U.S. stock prices has put them in a danger zone that could trigger so-called "mechanical selling" pressure and accelerate a downside move, according to Nomura strategist Charlie McElligott. U.S. equities tumbled on Thursday, as surging Treasury yields pressured growth stocks a day after the Federal Reserve signaled another rate hike coming this year and stiffened its hawkish stance. On Wednesday, the S&P 500 dropped to 4,401.38, near a a four-week low, putting the index on the verge of setting off a deluge of "mechanical selling", or stock selling by options dealers and certain trend-following investors, including commodity trading advisors (CTAs), Nomura’s McElligott said.
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