Investing.com -- Last week, hedge funds significantly invested in US equities, contributing to the S&P 500 Index ’s second-largest weekly gain of the year.

According to Goldman Sachs Prime Desk, this marked the most substantial net buying since December 2021. The increase was primarily due to short covers, with long buys also playing a part.

The bulk of this buying activity was observed on Monday and Tuesday of the past week. Goldman Sachs Prime Desk suggests this indicates hedge funds were buying in response to the market rally following a US-China trade deal.

The desk’s note to its clients highlighted that individual stocks made up 47% of total buying, while macro products accounted for the remaining 53%.

The past week also saw a 5.8% decrease in short positions in US-listed ETFs, marking the most significant short covering since November 2024. This trend was led by large-cap and tech ETFs.

In addition to this, for the third consecutive week, hedge funds continued to buy the dip in health care stocks, as reported by Goldman Sachs Prime Desk.

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