Hedge funds accelerated net sales of global equities last week at the fastest rate since the tariff-driven market turmoil of April 2025, according to a report by Bloomberg citing a note from Goldman Sachs’ Prime Services Desk.

Net selling through 19 February registered a negative 1.4 standard deviation from typical levels, reflecting heavy reductions in long exposure and increased short-selling activity.

All major regions saw net selling, led by North America and Europe. European equities experienced the fastest outflows in five months, while seven of 11 global sectors were net sold, with financials seeing the largest disposals. Conversely, energy, healthcare, and staples were net-bought. Single-stock and macro products accounted for 58% and 42% of total net selling, respectively.

The activity signals growing caution among hedge funds amid mixed economic data and concerns that artificial intelligence-driven disruptions could affect market sentiment. Despite the heavy selling, hedge fund performance has remained broadly solid so far in 2026, even as volatility spiked with the worst single-day losses for several strategies since the Covid pandemic.

Goldman noted that US-focused funds were particularly active in reducing exposure and increasing short positions, highlighting a shift toward capital preservation amid uncertain global growth and market conditions.