Hedge funds last week significantly increased their bets on rising stock prices, anticipating a potential ceasefire in Iran. This strategic shift occurred just before global markets reacted to U.S. actions regarding Iranian shipping.
The majority of hedge fund stock trades, as of Friday, were long for the first time in eight weeks, marking a decisive move away from short positions. This indicates a strong bullish sentiment.
Systematic hedge funds, including commodity trading advisors, were projected to purchase approximately $40 billion in S&P 500 stocks this month. Traders exclusively taking long positions re-entered the market after a period of caution.
Despite the broader market's long positioning, hedge funds maintained short positions on individual stocks. Notably, they sold the largest volume of tech stocks in five years, with software comprising 60 percent of these sales. Global stock-picking hedge funds saw a 4 percent return during the week.