Tech selloff erases hedge fund gains and forces funds to cut risk
A tech-led equity rout has wiped out year-to-date gains at many hedge funds, prompting risk cuts and layoffs, Reuters reports.
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what happened
A global equity selloff led by technology stocks has erased this year's gains for many hedge funds and pushed some managers to reduce risk and shrink their investment teams, Reuters reports. Goldman Sachs estimates that tech-focused long-short funds fell more than 4% on Thursday, leaving their returns for the year roughly flat. Their peak gain, reached in June, was 24%.
The heaviest blow fell on Walleye Capital, a fund with $17 billion in assets. It plans to trim its internal equity long-short business and cut a substantial part of its equity team, and it intends to return some capital to investors. JPMorgan estimates global hedge funds lost 3% in October, while the Nasdaq 100 dropped 6.6%, its steepest monthly fall in 18 months.
why it matters
Simultaneous de-risking at large funds can add pressure to tech stocks, since many managers hold the same positions. PivotalPath noted a high degree of overlap among the ten largest multi-strategy funds, so their unwinds could hit the same shares.
market impact
US stocks: hedge fund selling of large tech shares pressures the Nasdaq 100
- Nasdaq 100 pressure down — hedge funds are cutting risk and selling large tech holdings
- Hyperscaler shares pressure down — funds are unwinding positions they had recently bought
instruments
sources
- Tech selloff wipes out hedge fund gains, prompting risk cuts and layoffs — Reuters, 6 November 2026 at 06:51 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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