Stock futures decline as banks warn of losses

U.S. equity futures fell on Monday after a major investment fund liquidated billions of dollars in holdings last week, raising concerns that global banks dealing with the company may face heavy losses.

S&P 500 futures slipped 0.3%. The general market index hit a record high on Friday. Dow Jones Industrial Average futures fell 0.4%. Futures contracts on the Nasdaq-100 were relatively stable.

Investors braced for more uncertainty after a big trader late last week quickly sold off holdings in a handful of companies, including ViacomCBS and Discovery, which led to their stock plummeting. The move was made by former Tiger Asia director Archegos Capital Management Bill Hwang, who sold $ 30 billion worth of securities, people familiar with the matter said.

Global investment banks Credit Suisse Group and Nomura Holdings said on Monday they could suffer substantial losses from transactions with a US client. Neither bank named its respective client. Shares of some global banks fell as investors feared more financial intermediaries would struggle to recover the money loaned to this client.

“We do not yet know the main reason why this hedge fund had to liquidate,” said Luc Filip, investment manager at SYZ Private Banking. “It adds to the disturbing things that are happening in the market.”