Hedge funds suffer their worst daily drop since Covid
All three major equity strategies lost more than 1% on Thursday as tech stocks were sold and oil rose. Goldman Sachs had not seen anything like it since the pandemic.
Hedge funds, investment vehicles that bet on stocks both rising and falling, had their most widespread day of losses since the pandemic on Thursday. The three main equity strategies Goldman Sachs tracks each fell more than 1% in the same session, according to the bank's prime brokerage division, the unit that serves those funds as clients.
It is the first time since Covid that all three have dropped that much on the same day. Investors again sold technology stocks, worried about whether spending on artificial intelligence infrastructure will pay off, while rising oil prices added pressure. The Nasdaq 100, which groups the 100 largest nonfinancial companies on that exchange, lost 2.9%, its biggest drop since June. Nvidia fell 4%, and Meta fell 7% after announcing a new class of shares.
The damage was not limited to tech. Managers focused on telecom, media and technology lost 2.7% on average, but the strategies that usually diversify fell too:
| Strategy | Drop | Context |
|---|---|---|
| Global fundamental long/short | 1.4% | Its worst session since July 16 |
| Systematic long/short | 1.3% | Its third worst since December 2023 |
| Multistrategy | 1.9% | Its second-largest daily drop since April 2025 |
| Telecom, media and technology | 2.7% | Average for the sector's managers |
More than two-thirds of funds ended Thursday with losses. In the second half of the session, bearish bets that many managers share made the result worse. The figures reflect only Goldman's clients, not the whole industry, and the bank does not publish them in full.
Through Oct. 22, global fundamental long/short funds are down 3.8% for October, though still up 8.8% for the year. Technology funds are down about 10% for the month.
