US margin debt fell by approximately $85 billion in July, dropping from $1.502 trillion to $1.417 trillion, marking the largest single-month decline ever recorded in FINRA data. The drop snapped a streak of consecutive monthly increases that had pushed leveraged borrowing to an all-time high just weeks earlier, with year-over-year growth exceeding 50% in June. The sharp reversal suggests forced selling triggered by margin calls rather than voluntary profit-taking, echoing deleveraging cycles that have historically preceded major market corrections in 2000, 2007, and 2021. Investors are now watching whether August and September data will confirm this trend or reveal an isolated air pocket.
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