Has the U.S. stock market not yet formed a reliable bottom? Goldman Sachs warns: macro hedge funds remain heavily positioned, and could face US$28 billion in selling over the coming week.

Title context: Has the U.S. stock market not yet formed a reliable bottom? Goldman Sachs warns: macro hedge funds remain heavily positioned, and could face US$28 billion in selling over the coming week. Text: Although U.S. stocks rebounded strongly on Monday after last week's sharp decline, Wall Street positioning data show that the market's underlying selling pressure has not yet been fully released. Data from Goldman Sachs Group, Inc.'s prime brokerage business show that global macro hedge funds barely reduced equity exposure during the S&P 500's worst weekly performance of 2025. At the same time, retail investors and hedge funds focused on single-stock trading retreated from the market. This positioning divergence means that if market sentiment deteriorates again in the future, macro hedge funds that still maintain high equity exposure could become a source of a new round of selling pressure. This is especially the case over the next two weeks, when U.S. stocks will face a dense schedule of major events, including NVIDIA Corporation's (NVDA.US) earnings release on November 17 and the closely watched Anthropic initial public offering (IPO). According to reports, Anthropic plans to set the IPO issue price on November 18. In addition, the monthly options expiration date will arrive on November 20. With the latest CPI data released on Tuesday stronger than expected, traders further increased bets on a Federal Reserve rate hike in December, and yields on 2-year to 5-year U.S. Treasuries rose by more than 10 basis points. Previously, Federal Reserve Governor Waller said in London that he supported a rate hike and that he would favor a 50-basis-point increase if inflation continues to accelerate. As a result, traders have fully priced in a 25-basis-point Fed rate hike in December, U.S. stock futures fell sharply, and Nasdaq 100 futures dropped 1.5% to hit premarket lows. John Marshall, a partner at Carrick Lane, said in a note to clients: "The good news is that market positioning has fallen from a record high to average levels. The bad news is that the decline in positioning has not been large enough for investors to start buying stocks based on this indicator alone." Data from Goldman Sachs Group, Inc.'s prime brokerage business show that single stocks last week saw the largest net selling in four months, while macro trading products such as equity indices and exchange-traded funds (ETFs) recorded net buying. This indicates that although some investors have significantly reduced risk exposure, macro funds trading through instruments such as stock index futures, ETFs and swaps remain relatively optimistic. Marshall noted that another gauge of macro fund activity is financing costs related to equity investments. Last week, financing spreads related to S&P 500 futures remained stable. He also said that in recent months, macro investors have responded more noticeably to changes in oil prices and interest rates, while sensitivity to news related to artificial intelligence (AI) technology has declined. In addition to macro fund positioning, quantitative trading strategies may also amplify market volatility. Trading signals tracked by Goldman Sachs Group, Inc. show that about 60% of global equity markets have turned negative, and its model estimates that S&P 500 futures could face about US$28 billion in potential selling over the coming week, with potential selling over the coming month reaching US$45 billion. Risks also exist in the options market. Traders pointed out that the market's current negative Gamma exposure may amplify stock price volatility. In a negative Gamma environment, options dealers, in order to hedge risk, often need to sell more stocks when the stock market falls and increase buying when the stock market rises, thereby intensifying volatility in both directions. According to the volatility model of options analysis firm SpotGamma, the S&P 500 has a large range of negative Gamma exposure between 7,000 and 7,550. On Monday, the S&P 500 rose 2.4% to close at 7,549.94, already near the upper end of this range. SpotGamma analysts pointed out that the timing of several major upcoming events will determine when potential market pressure can ease. NVIDIA Corporation will report earnings on November 17, Cboe Global Markets Inc's volatility index (VIX) monthly options will expire on November 18, and stock index monthly options will then expire on November 20. The firm said in a report: "Before these positions are cleared, the data show that the market may still see relatively large two-way volatility." Technical analysis indicators also suggest that the recent U.S. stock market correction may not yet be fully over. BTIG pointed out that several indicators measuring market breadth and investor sentiment have still not reached the levels typically associated with a sustained market bottom. Currently, about 62% of S&P 500 constituent stocks are still trading above their 200-day moving averages, whereas at historically solid market bottoms, this proportion is usually below 30%. This means that although the stock market has recently undergone a clear correction, from the perspective of market breadth, a typical broad oversold condition has not yet appeared. In addition, although the indicator measuring investors' demand for put options relative to call options over the next month has begun to rise, it remains far below the levels seen when the market bottomed in March and July of this year. BTIG analyst Jonathan Krinsky believes this shows that investors have not yet displayed the panic sentiment that usually accompanies a full market washout, so it is still difficult to confirm that U.S. stocks have formed a reliable bottom. The technical trend of the semiconductor sector is also sending a warning signal. The Philadelphia Semiconductor Index closed below its 200-day moving average for the first time since May 2025. Krinsky noted that although similar technical breakdowns sometimes trigger strong rebounds, historical data show that the average return over the 50 trading days after such signals appear is negative, so it cannot be regarded as a clear buy signal. Overall, although the strong rebound in U.S. stocks on Monday eased some market pressure, macro hedge funds remain highly exposed to equities, quantitative trading models indicate that potential selling is not small, and the negative Gamma risk in the options market and technical indicators that have not yet fully adjusted mean that the market may still face significant volatility in the near term. As key events such as NVIDIA Corporation's earnings and Anthropic's listing arrive one after another, whether U.S. stocks can sustain their rebound remains to be seen.