S&P 500 Hits Record as Hedge Funds Stack Up $11.6B in Two Weeks

• S&P 500 record high comes as Hedge Funds buying reaches an 18-year high, with $11.6B added to US stocks over two weeks
• The S&P 500 rally coincides with strong hedge fund demand, while institutional investors and retail investors recorded net sales
• Institutional stock buying remains mixed as hedge funds increase US equity exposure despite selling from other investor groups

The S&P 500 record high rally is putting the US stock market back into global focus. The index has recently approached the 7800 high mark, putting the attention back on the US equities. At the same time, a sharp increase in hedge fund buying is also gaining momentum, with hedge funds adding billions to the US equities in the last two weeks.

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S&P 500 Rally Reaches a New High

The S&P 500 rally is now the latest center of attention. The index has hit a new high of 7800, closing at 7,798.99 on August 13. Per the latest post by the Bull Theory on X, the broader market momentum has strengthened collectively, with the Russell 2000 index reaching a record high as well.

“BREAKING: 🇺🇸 The S&P 500 and Russell 2000 just hit NEW ALL-TIME HIGHS. The Nasdaq 100 is also up +1% today, reclaiming 30,000 for the first time in 43 days. US stocks have added roughly $5 TRILLION in market value over the past 15 days. The rally is being driven by softer inflation data, with Tuesday’s CPI and today’s PPI. Both readings are easing inflation concerns and reducing pressure on the Fed ahead of its September meeting.”

In addition to this, the NASDAQ 100 has also climbed above 30,000 for the first time in 43 days.

The post linked the market gains to softer CPI and PPI readings, which eased concerns around inflation and the outlook for Federal Reserve policy. Both readings have helped ease inflation concerns, potentially reducing pressure for further rate increases ahead of the Fed’s September meeting.

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Hedge Funds Step Up the Stock Buying

In addition to this, the Bull Theory post further shared how US stocks have added $5T in the market value over the last 15 days. According to the Bull Theory post, another noteworthy development was later shared by the Kobiessi letter. The KL post outlines how hedge fund buying has accelerated, adding more momentum to the S&P 500 record high rally.

Hedge funds are expanding their institutional exposure by adding more US equities to their portfolio. According to the Kobeissi Letter post, hedge funds have added nearly $6.8B worth of US equities last week, the highest in 18 years.

These funds had earlier purchased US equities worth $4.8B a week prior.

“BREAKING: Hedge funds bought +$6.8 billion in US equities last week, the largest weekly purchase in 18 years. As a % of the S&P 500’s market cap, this was the 9th-largest weekly purchase since 2008. This follows +$4.8 billion in purchases the week prior, bringing the total to +$11.6 billion over the last 2 weeks, the largest 2-week purchase on record. This also pushes the 4-week average of hedge fund purchases up to +$1.8 billion. Meanwhile, institutional investors sold -$1.1 billion, posting their 2nd consecutive weekly sale. At the same time, retail investors sold -$4.1 billion, bringing their 4-week average of sales up to -$500 million. Hedge fund demand for US stocks is skyrocketing.”

This development highlights the strength of recent hedge-fund demand for US equities.

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