Hedge Funds Boost U.S. Equity Shorts Following Severe Tech-Driven October Losses

Hedge funds are aggressively expanding short positions in U.S. stocks to recoup performance following steep October losses, according to Goldman Sachs prime brokerage data. The de-risking followed an October 22 selloff marking the worst single-day hedge fund performance since the COVID-19 pandemic. On that day, multi-strategy funds slid 1.4%, systematic funds lost 1.2%, and fundamental equity strategies declined 1.1%. Driving the retreat, Meta sank 7% and Nvidia fell 4% amid artificial intelligence expenditure skepticism, dragging the Nasdaq Composite down 2.6% and pushing monthly losses for tech-focused funds to roughly 10%.