JPMorgan estimates that quarter-end rebalancing could trigger a $165 billion stock selloff before June ends, as global hedge fund leverage sits near multi-year highs. Goldman Sachs prime brokerage data shows gross hedge fund leverage reached about 294% in June 2025, a five-year high, while net leverage has since pushed to four-year highs. JPMorgan strategist Nikolaos Panigirtzoglou warned that stretched positioning in semiconductors, where their share of global equity value is now more than six times their share of revenue, raises the risk of more frequent selloffs. The mechanical selling is expected to be led by Japan's Government Pension Investment Fund at about $60 billion and US pension funds at another $55 billion, with Norway's and Switzerland's funds adding tens of billions more. The hawkish Federal Reserve stance under new Chair Kevin Warsh has repriced rate-cut bets and lifted volatility, while Bitcoin has weakened and now trades more like a tech stock, with JPMorgan flagging that the network's hash rate has grown more sensitive to price.
JPMorgan Chase & CoJPMorgan is the source of the selloff warning and strategist commentary, but the news is about market-wide rebalancing, not a direct impact on JPMorgan itself.
Goldman Sachs Group Inc