U.S. stocks are facing a significant selloff

U.S. stocks are experiencing a significant selloff after two years of gains. The Nasdaq 100 Index fell 3% on Monday, while the S&P 500 Index dropped 2%, nearing a correction and closing below its 200-day moving average for the first time since November 2023. Concerns about a potential recession are rising, with President Trump warning of economic disturbances from trade wars. Wall Street strategists are increasing their recession forecasts, leading to a decline in stock positioning and heightened market volatility. Hedge funds are reducing their U.S. stock exposure, and firms like HSBC and Ned Davis Research have downgraded their U.S. stock ratings. The Cboe Volatility Index indicates increased market stress, while small-cap stocks continue to struggle, suggesting a broader market rebound may not be imminent.