Hedge Funds Sell Off U.S. Tech Stocks Amid Infrastructure Fears

Hedge funds engaged in significant risk reduction and capitulation across U.S. equity markets on November 5, 2026. The sell-off followed a volatile period linked to recent election results, with trading data from UBS and Goldman Sachs showing a sharp decline in semiconductors, memory companies, and neoclouds.

Hedge funds are liquidating positions in hyperscalers and technology, media, and telecommunications sectors. Traders cite concerns that bottlenecks in data center infrastructure—specifically land, power, and shells—will create a semiconductor oversupply by 2028. This activity triggered high trading volumes in the SPY, QQQ, and SMH ETFs.

While long-only investors remained largely frozen, multi-strategy and systematic funds experienced significant losses. Goldman Sachs reported an explosion of client inquiries for market color as funds moved to reduce exposure. UBS sales and trading desks confirmed the trend of sharp selling in the technology and semiconductor sectors.