News Digest:

Equity long/short hedge funds wiped out their 2024 gains on Thursday as stocks plummeted following the Trump administration’s sweeping tariff announcement.

The funds fell 1.7% in a single day, bringing their year-to-date losses to 1.6%, according to Goldman Sachs. This marks the second major setback in a month. On March 10, similar concerns over tariffs sent funds tumbling 1.5% as portfolio managers unwound trades, fearing a potential recession.

Investor sentiment among hedge funds has been increasingly bearish, hitting a five-year pessimism high, a separate Goldman Sachs report noted last week. Despite this, hedge fund leverage has remained near record levels over the past five years.

The tariffs triggered a global market sell-off, driving investors toward safe-haven assets. The S&P 500 dropped 4.16%, while the Nasdaq plunged 5.3%. Meanwhile, the U.S. dollar weakened as uncertainty loomed over the economy.

With market volatility surging and hedge funds adjusting their strategies, analysts warn that continued uncertainty around trade policies could fuel further market instability in the months ahead.

End Notes

Source: https://www.investing.com/news/stock-market-news/equity-longshort-hedge-funds-wipe-out-year-gains-in-market-rout-3966364