Hedge Funds Hit by Worst Day in Months Amid AI-Fueled Rotation

The turmoil unleashed in stocks this week by worries about the impact of artificial intelligence has rattled a slew of hedge fund strategies that had been enjoying a strong start to 2026.

As one of the wildest rotations in years scrambled the equity leaderboard, both fundamental and systematic long-short hedge funds posted the worst day since at least November on Wednesday, according to a note from Goldman Sachs Group Inc.’s prime brokerage. Multi-strategy equity portfolios suffered the worst session since April, the bank estimated.