Institutional buying hits record high, but hedge funds are quickly pulling out of tech stocks In the previous post, we mentioned that Bank of America clients net bought approximately $8.2 billion in U.S. single stocks from July 20 to 24, marking the highest level since tracking began in 2008. Among this, traditional institutions net bought $9.1 billion, while retail investors and hedge funds net sold $300 million and $600 million, respectively. Now, Goldman Sachs data further indicates that hedge fund reductions are likely focused on tech stocks and semiconductors. On July 24, Goldman Sachs Prime Brokerage clients saw single-day long flows into global IT stocks drop to nearly negative 4 standard deviations, with the selling intensity hitting the highest level since 2024 and the fifth-largest single-day sell-off in the past five years. This sell-off mainly came from the closing of existing long positions. In other words, hedge funds are selling off previously held tech stocks, reducing leverage and risk exposure. Of course, this doesn’t necessarily mean hedge funds are starting to short tech stocks on a large scale. More accurately, U.S. equity flows are undergoing structural rotation. Traditional institutions are buying a broader range of U.S. stocks, while hedge funds are concentrating their exits from tech stocks during the global semiconductor downturn. Traditional institutions are picking up stocks sold by retail investors and hedge funds while continuing to increase their overall positions. Hedge funds, on the other hand, are prioritizing reductions in higher-volatility, more crowded positions in tech stocks and semiconductors. As a result, U.S. stock indices may still find support from institutional buying, but tech stocks are likely to remain highly volatile. In the short term, the nearly negative 4 standard deviations of selling is already extremely extreme. If global semiconductors continue to decline and hedge fund deleveraging isn’t over, the market may continue to see relatively stable indices, while tech stocks and retail investor favorites face greater selling pressure. @Gate Crypto, U.S. stocks, Hong Kong stocks, Korean stocks, gold, CFD, prediction markets all-in-one trading platform