Hedge funds executed their largest sale of global information technology equities in the three days ending July 28, the biggest such move since data collection began in 2016. The unwind also marked the largest three-day reduction in total equity exposure since November 2022, with selling pressure spreading across all sectors.
The primary driver was short covering in macro products, including major index futures and exchange-traded funds. Single stocks also saw heavy outflows, posting the fifth-largest three-day sale over the past five years. Hedge funds moved to reduce leverage, rebalance portfolios and shift capital to the sidelines as uncertainty rose.
North America accounted for the majority of the sales, with European markets also seeing significant outflows. Despite the broad tech exodus through July 28, several U.S. tech giants showed strength in subsequent trading. Microsoft climbed 16.4 percent to $454.40, while Amazon rose 5.3 percent to $238.65—a flight to quality among institutional investors re-evaluating core holdings after the widespread unwind.
Other major tech names fell. Apple dropped 1.8 percent to $332.14, Meta fell 9.5 percent to $530.26 and Alphabet slipped 0.9 percent to $333.73. The divergence points to selective positioning, favoring companies with strong fundamentals and clear growth narratives over those facing competitive headwinds or valuation concerns. Nvidia gained 1.8 percent to $193.34, reflecting continued institutional interest in AI-driven names.
Investors should monitor the Consumer Price Index release scheduled for Aug. 13. The report will influence Federal Reserve policy expectations and could set the direction for equity markets as August begins.
