Market Summary - April 1, 2026
US Market Overview
As the US market prepares to open, futures on major US indices are showing modest gains. The S&P 500 has recently experienced its best session since May of the previous year, leading investors to speculate on the potential for continued recovery. Specifically, the S&P 500 futures are up by 0.6%, the Dow Jones is up by 0.5%, and the Nasdaq 100 is seeing an increase of nearly 0.9%. This uptick follows stronger-than-expected ADP employment data, which reported an increase of 62,000 private payrolls, surpassing the forecast of 40,000.
Hedge Fund Activity
Hedge funds have been reducing their exposure to global equities for six consecutive weeks, primarily through short selling. This trend has affected all major regions, with short positions in macro instruments in Europe reaching approximately 11%, the highest level in a decade. Over the past six weeks, net selling of US equities has been the third largest in the last ten years, nearing levels observed during the COVID-19 pandemic. Commodity Trading Advisors (CTAs) have sold around $190 billion worth of equities in the last month and currently maintain a net short position of about $50 billion. However, Goldman Sachs anticipates that CTAs may shift to buying in various scenarios over the next month.
Pension Funds and Market Dynamics
Goldman Sachs also predicts that pension funds will begin purchasing equities due to month-end and quarter-end rebalancing activities. Approximately $7 billion of negative options gamma is set to expire at the end of the month, which could alleviate some market pressure. The Nasdaq 100 has fallen over 10% from its peak, officially entering a correction phase, while the S&P 500 is approaching similar territory. In Europe, the Stoxx 600 index has declined by about 9% in March, marking its worst month in six years. Overall, equity markets are nearing technically oversold levels, with indications of hedge fund capitulation and heightened pessimism noted by Goldman Sachs.
Sector Performance and Notable Stocks
In sector-specific news, the energy sector ETF (XLE) has dropped nearly 2% following comments from Donald Trump regarding a potential US withdrawal from Iran within a few weeks. Nike's stock has plummeted by 11% due to weak guidance and subsequent downgrades from major banks including JPMorgan, Goldman Sachs, and Bank of America. Conversely, Cal-Maine Foods has seen a 4% increase after exceeding expectations in both earnings per share (EPS) and revenue. Notable gainers include nCino, which is up 23.2% after positive quarterly metrics, and Target Hospitality, which has surged 33.4% following a significant contract win. Additionally, Bank of America and Wells Fargo have seen slight increases after an upgrade in the banking sector's outlook.