Hedge Funds set to dump more U.S. Tech Stocks
Over $40 billion worth of stocks were rapidly sold off by global hedge funds and leveraged exchange-traded funds (ETFs), which became increasingly pessimistic after President Donald Trump’s startling announcement of higher-than-expected global tariffs on Friday.
The stock market value of S&P 500 companies has fallen by more than $4 trillion since Trump raised tariff barriers to their highest level in over a century late Wednesday
JPMorgan noted in a report that to tame high-risk exposure, volatility-targeting portfolios were set to sell between $25 billion and $30 billion worth of stocks in the coming days.
U.S. Tech stocks, leveraged ETFs had an additional $23 billion to sell to rebalance before today’s close, according to JPMorgan.
The bank also reported that macro systematic strategies sold stocks on Thursday at unexpectedly high levels and would need to sell more if another meltdown occurred on Friday.
In a separate note from Goldman Sachs, global equity long/short hedge funds experienced net selling in nearly 15 years on Thursday and became the most pessimistic since 2011.
Clients of hedge fund trading and leveraged providers Goldman Sachs and JPMorgan closely monitor market trends.
JPMorgan added that it operates under certain assumptions. Besides not immediately responding to a request for comment, Goldman did not reveal the net selling dollar amount mentioned in its note.
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