Hedge funds increase short positions on US stocks amid tariff concerns

Hedge funds have sold off U.S. stocks for five consecutive weeks, betting against various sectors due to President Trump's planned tariffs. The selling was most significant in industrials, consumer discretionary, energy, and communications, with short positions on industrial stocks nearly doubling long positions. Real estate stocks were the only area where hedge funds expected values to rise, as they often perform well in inflationary conditions. The recent sell-off coincided with concerns over potential market turmoil from tariffs and advancements in artificial intelligence in China. In contrast, individual investors have increased their stock purchases, believing Trump may delay tariff enforcement. Last Friday, they invested $2.1 billion in U.S. stocks, marking one of the largest single-day investments in recent years.