Hedge funds sold tech stocks at a record pace last week, triggering the biggest momentum crash in about 40 years, per Goldman Sachs and JPMorgan. The Nasdaq 100 lost $2.3 trillion in a day after the Democratic midterm sweep raised AI regulation concerns.
JPMorgan's Dubravko Lakos-Bujas notes deleveraging at "Liberation Day" levels, with sentiment swinging bearish. Yet hedge funds turned net buyers by Friday, covering macro positions. S&P 500 earnings are forecast to grow 30% in 2026 and 20% in 2027 (Bloomberg Intelligence).
Morgan Stanley's Michael Wilson sees the correction nearing its end, targeting the S&P 500 at 7,100-7,300, and recommends adding quality cyclicals. HSBC's Max Kettner is increasing exposure tactically, citing Anthropic PBC's planned IPO as a bigger catalyst than the midterms.
Citigroup's Beata Manthey downgraded US tech to neutral, seeking cleaner positioning. JPMorgan flags near-term risks: trillion-dollar IPOs, a Texas grid permit review, and geopolitics affecting the Fed. Fundamentals remain supportive.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing