Hedge funds have significantly increased short positions on US equities, with data showing the largest notional short selling on record across single stocks, according to a report by Bloomberg citing Goldman Sachs prime brokerage figures going back to 2016.
Short sales outweighed long purchases by roughly two-to-one last week, as hedge funds continued to reduce exposure to US equities for a fourth consecutive week. Net selling was the heaviest since the escalation of US-China trade tensions during Donald Trump’s presidency.
The surge in bearish positioning reflects growing concern that advances in artificial intelligence are accelerating disruption across corporate business models. Anxiety intensified following last week’s market selloff, which was partly triggered by the launch of new AI tools capable of automating a wide range of work tasks across multiple industries.
Despite the defensive positioning, US equities rebounded early this week, driven by renewed strength in technology stocks. Chipmakers and software-focused exchange-traded funds posted strong gains, highlighting sharp sector-level volatility even as hedge funds remain broadly cautious.
