Hedge funds are selling stocks at the fastest pace in four years as tariffs and signs of an economic slowdown in America upend markets worldwide.
Investment bank Goldman Sachs’ (GS) says that hedge funds are selling stocks and covering their short bets at the fastest rate since 2021 when inflation began to rise sharply at the tail end of the Covid-19 pandemic.
Hedge funds are retreating from equities as the macroeconomic environment in the U.S. deteriorates and as U.S. President Donald Trump’s aggressive tariffs on imports creates volatility around the globe.
Goldman Sachs has blamed the decline in the stock market in recent weeks, with the benchmark S&P 500 index near correction territory, partly on massive selling by hedge funds.
The Wall Street firm earlier this week lowered its year-end target on the S&P 500 to 6,200 from 6,500, the first major Wall Street firm to downgrade the U.S. market.
According to Goldman, hedge funds have been selling technology and industrial stocks the most in recent days and parking cash or placing it in bonds and alternative investments.
The stock of Goldman Sachs has fallen 17% in the last month as U.S. equity markets tank. The bank’s share price is currently at $535.71 U.S. per share.
