Hedge Funds Short US Stocks and Pivot Toward Europe

Hedge funds are pivoting their strategies as global market volatility intensifies, significantly increasing bets against equities in the United States and emerging markets in Asia while turning toward European shares. According to a recent client note from The Goldman Sachs Group, Inc., last week saw the most substantial net selling of global stocks since April 2025, marking the fifth consecutive week of increased short positions by speculators.

This shift occurs against a backdrop of a three-week decline in global shares. Investors are grappling with rising bond yields and geopolitical instability involving Iran, which has sparked fears that a prolonged conflict could drive oil prices higher and exacerbate inflationary pressures.