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On Monday, according to Goldman Sachs brokerage data, hedge funds' long and short positions both decreased in the week ending July 19, continuing the trend of reducing holdings since May.Hedge funds are hoping that "cash is king" ahead of the US presidential election in November.

U.S. stocks suffered a sell-off last week, and star technology stocks that had performed strongly in the early stages were the hardest hit.Goldman Sachs' brokerage division said hedge funds rushed to liquidate their long and short positions in the week ending July 19, with the pace of hedge fund selling being the fastest since January 2021.

Looking back three and a half years ago, when the Internet celebrity stocks drove the US stock market up, they began to be sold off. Tesla, the hottest leader in the US stock market, also peaked around that time.

Goldman Sachs data also showed that the long-short net leverage ratio of these funds fell to 49.8% last week, the lowest level since March 2023. This indicator is often seen as a barometer of risk appetite. At the level of individual stocks, the largest liquidations came from information technology, healthcare, finance and energy.

Goldman Sachs brokerage division said:

Overall, this week was full of painful liquidations, with early winners such as semiconductors, mega-cap stocks, and artificial intelligence concept stocks all falling sharply.
Last Wednesday felt like peak de-risking, with fundamental long-short hedge funds in pain.
Most of the supply we saw came from funds that are not focused on one particular industry or sector and have reduced their exposure to artificial intelligence stocks, which have seen big gains so far this year.

Last Friday, major U.S. stock indexes fell, with the VIX index hitting its highest level since late April. The Russell small-cap index fell for three consecutive days, and the chip index fell by more than 3%. For the whole week, the Dow Jones and small-cap stocks rose cumulatively, while the Nasdaq ended its six-week winning streak, and the S&P 500 and Nasdaq had their worst single-week performance in three months.