Hedge Fund Managers Sell U.S. Stocks Sensitive to Commodities Amidst Rising Oil Prices

Global hedge fund managers have been selling U.S. stocks sensitive to commodities at an accelerated pace, according to a note from Goldman Sachs. This selling spree occurred just before the price of oil surged by over $3 a barrel on Monday. The increase in oil prices followed the largest military assault on Israel in decades, which resulted in hundreds of casualties and several abductions.

The recent jump in crude oil prices reversed the previous week’s downtrend, where Brent fell approximately 11% and WTI retreated more than 8%. Concerns about high interest rates and their impact on global demand contributed to this decline. However, the eruption of violence over the weekend threatened U.S. efforts to broker a rapprochement between Saudi Arabia and Israel, potentially impacting the oil market.

Hedge funds have ramped up selling shares of U.S. companies involved in manufacturing chemicals, building materials, and paper products. According to Goldman Sachs’ prime brokerage, this selling activity reached its fastest pace since early June. U.S. energy stocks also experienced net sales for the second consecutive week, with the trend continuing over the past eight trading sessions.

The oil price surged by more than 3% on Monday, reaching $87.27 a barrel. This sudden increase has caught the attention of market participants, highlighting the potential impact of geopolitical events on commodity prices.

While the situation remains fluid, investors will closely monitor developments in the oil market and the ongoing efforts to stabilize the situation in the Middle East. The actions of hedge fund managers reflect their cautious approach in light of recent events, as they navigate the potential impact on global markets.