Hedge funds are dumping their stock holdings at the fastest pace in four years as tariffs and signs of an economic slowdown in the U.S. continue to roil markets.
Data from Goldman Sachs’ (GS) prime brokerage unit shows that professional money managers and hedge fund traders are selling stocks and covering their short bets at the fastest rate since 2021 when inflation began to rise dramatically and the prospect of higher interest rates came into view.
Hedge funds are retreating from equities as the macroeconomic environment in the U.S. has grown less clear, and as U.S. President Donald Trump’s aggressive tariffs on foreign imports into America creates volatility in equity markets.
Recession Fears
Goldman Sachs has blamed the decline in the stock market in recent weeks, with the benchmark S&P 500 index down 9% from its recent peak, partly on rapid selling among hedge funds and other money managers. Earlier in the day, Goldman Sachs’ lowered its year-end target on the S&P 500 index to 6,200 from 6,500, the first major Wall Street firm to do so.
According to Goldman, hedge funds have been selling technology and industrial stocks the most in recent days. Speaking to CNBC, Brad Gerstner, CEO of the Altimeter Capital hedge fund, said he’s lowered his stock holdings to the bottom decile of the firm’s risk exposure “We have high economic uncertainty, high political uncertainty, and high technological uncertainty,” he said in explaining his decision.
Is GS Stock a Buy?
The stock of Goldman Sachs has a consensus Moderate Buy rating among 15 Wall Street analysts. That rating is based on 11 Buy and four Hold recommendations assigned in the last three months. The average GS price target of $675.00 implies 25.28% upside from current levels.
Read more analyst ratings on GS stock
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