US stocks face sell-off as Trump effect reverses

US stocks on Monday faced the heaviest sell-off since before the presidential election in the biggest reversal yet of the so-called Trump trade that has carried equities to record peaks.

The S&P 500 index, a broad barometer of American stock performance, fell as much as 1.2 per cent in late-morning trading in New York. That represented the steepest intraday fall since November 1st and came after it struck a new record high last week.

Investor sentiment has shifted sharply at the start of the week, with the sectors that have performed best since Donald Trump’s surprise victory facing the brunt of the selling.

The energy, financials, industrials and materials sectors were all down by more than 1 per cent. In contrast, defensive plays that have performed poorly amid expectations for higher US economic growth, were largely spared. Utilities and consumer staples were essentially flat, the real estate sector was down marginally.

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Traders also moved into other perceived havens. The yield on the benchmark 10-year Treasury note slipped by 2 basis points to 2.47 per cent as the Japanese yen climbed by 1.2 per cent on the US dollar.

- Copyright the Financial Times Limited