US Equities Weekly Rundown 7 31 26

US Equities Weekly Rundown Global Banking & Markets July 31, 2026 Positioning, Flows, and Observations Across the Floor

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Portfolio Manager’s Summary The S&P 500 gained +1% this week and finished ~flat for July as investors have been navigating extreme volatility under the hood driven by concerns around the AI trade, technical factors, wars, a new Fed regime, capital market issuance, and Q2 earnings. Hyperscalers, Software, and AI-at-Risk were among the themes that outperformed, while IPPs, Memory, and Homebuilders were among the themes that underperformed.  Prime: US equities saw the largest net buying since Nov ‘20, driven by short covers across Macro Products and Single Stocks, as overall long flows finished relatively modest. ETF shorts were net covered for a 4th straight week, while 8 of 11 sectors were net bought (except HC/Utilities/Staples). Amid a busy week of earnings, HFs net bought US Info Tech stocks at the fastest pace since Dec ’22, driven by long buys as well as short covers.  Shares: From a flow perspective, little defense was played on the desk throughout the first half of the week, while question volumes were near record highs. Hedge Fund flows felt capitulatory to start the week, with the majority of activity being driven by selling of AI favorites & covering of shorts, especially in macro products. Toward the back end of the week, we began to see signs of re-grossing from both HFs & Asset Managers as momentum stabilized and strong prints from AMZN and MSFT reassured investors around the next potential leg of the AI trade.  Futures: Short term trend signals are recently more negative in the US, in S&P, Nasdaq and Russell and below the 7445 area for reference in S&P. The medium-trend area is around 7215, and medium and longer-term signals remain more positive. Signals are also still more positive in most major international markets, including at the short horizon, with pockets of EM the exception. We estimate CTA/trend followers have sold a modest $7bn in the last one week, due to $11bn of US sales. We estimate for them to be relatively neutral in the next one week in the baseline scenario.  Derivatives: As 34% of SPX earnings hit the tape this week, MSFT delivered the largest single session market cap increase in history on Thursday (+$550bn) only to have AAPL deliver one of the largest single day market cap decreases in history on Friday (-$500bn), and yet the SPX moved less than 1% week/week (as of time of writing). The “market of stocks” vs “stock market” remains top of mind as realized correlation approaches the lowest levels of all time. The GS vol desk is of the view that following positioning resets and some reduction of systemic leverage in the system, a sustained grind higher could manifest and likes adding long detla via short vol structures (call ratios or call spread collars).  ETFs: By far the most highly sought-after theme over the past two months has been the proliferation of levered/inverse ETFs. As of 7/29, US-listed levered/inverse ETF AUM hovered just shy of $150 billion, shedding nearly $60 billion since June highs. However, the reversion of AUM has had an outsized impact on net exposure for the complex, which has slid by roughly $170 billion over the past month and now represents $300 billion.  Baskets: Which Dips Are Worth Buying? While diverging AI capex and monetization narratives…