News Digest: US Equities Shorts up on Volatility, Middle-East Attrition
March 13, 2026
Hedge funds have ramped up their bearish bets on U.S. equities amid geopolitical tensions and heightened market volatility. According to a Bloomberg report citing Goldman Sachs data, hedge funds increased their short exposure to equity exchange-traded funds (ETFs) during the week ending March 6, reflecting growing caution toward the broader U.S. stock market.
Data from Goldman Sachs’ prime brokerage division showed that hedge funds boosted short positions in equity ETFs by 8.3% over the week, marking the second-fastest pace of new short positioning in the past five years. The move highlights a defensive shift in hedge fund positioning as investors brace for potential macroeconomic shocks.
Much of the unease stems from escalating tensions in the Middle East, which have raised concerns about possible disruptions to global energy supplies. Rising oil prices could reignite inflationary pressures just as central banks were beginning to gain traction in their fight against price increases. This geopolitical uncertainty has contributed to a broader sell-off in equity markets.
During the same period, the S&P 500 Index fell roughly 2%, while the Cboe Volatility Index (VIX) rose to its highest level since the market turbulence earlier this year triggered by trade tariff disputes. The spike in volatility suggests investors are increasingly hedging against downside risks.
Despite the surge in bearish positioning through ETFs, hedge funds have not fully withdrawn from U.S. equities. Goldman’s data indicates that managers increased exposure to individual stocks for the first time in five weeks. This suggests a more nuanced strategy: while funds are hedging against broader market weakness, they are simultaneously identifying and accumulating positions in companies they believe are attractively valued.
In effect, hedge funds appear to be adopting a barbell approach, pairing macro-level hedges with selective stock picking as they navigate an uncertain global environment.
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