The global sell-off in tech stocks has led to a pullback in hedge fund strategies, with some funds seeing their year-to-date returns near zero.

Global tech stocks continued their decline, and a reversal in AI-related trades led to a significant pullback in hedge fund strategy returns, with some funds seeing their year-to-date gains nearly wiped out. Several large funds reduced leverage and laid off investment teams. Goldman Sachs data shows that equity long-short strategy funds that primarily invest in technology stocks suffered a single-day loss of more than 4% on Thursday, bringing their year-to-date returns down to near zero. These funds had a cumulative return of 24% in June. Global fundamental equity long-short strategy funds fell an average of 1.3% on Thursday, while multi-strategy funds fell 1.4%, with selling pressure spreading to a wider range of portfolios.