De Blonay’s comments come after U.S. stocks fell sharply on Tuesday, on the back of concerns regarding the bond market.

Some analysts believe that the sell-off was triggered because of the way the complex machines operate. They are programed to sell when the odds of future market losses increase.

On Tuesday, U.S. short-term interest rates traded above long-term ones and, as a result, the setup of the algorithms could have translated that data as a selling point, leading to a general sell-off.

In February, when stock markets also saw a massive sell-off, a strategist told CNBC that the algo trading had sparked that overreaction.

Salman Ahmed, chief investment strategist at Lombard Odier, said: “The rise of algorithm-based trading means that there are in these algorithms some levels which trigger sell-off, i.e. sell orders.

“Yes, I can argue that we needed some kind of correction, given what has happened over the last few months. But the ferociousness of the intra-day sell-off is driven by these pre-set sell orders, which come programed in these algorithms automatically.”

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