ChainThink reports that on July 29, according to the Financial Times, Wall Street banks have requested certain hedge funds to post additional collateral to maintain their current leverage levels, due to the sustained decline in AI-related stocks over the past two weeks.
Sources say that banks such as Goldman Sachs and JPMorgan have issued margin calls to funds with highly concentrated positions in specific industries, with some requirements automatically triggered by market volatility-based risk controls.
Data shows that the Nasdaq 100 Index briefly fell 10% from its all-time high in early June; SanDisk and Intel declined 53% and 39%, respectively, from their year-to-date highs.
The Philadelphia Semiconductor Index has fallen approximately 25% since the end of June. Goldman Sachs previously reported that the total leverage of hedge funds in the first five months of this year saw the largest increase since statistics began in 2016.
As of local time on Tuesday noon, long-short strategy hedge funds declined an average of 1.3%, while multi-strategy funds fell 1.7%, marking one of the largest single-day drops since the extreme market volatility of the 2020 pandemic.
Goldman Sachs disclosed that, as of June 30, approximately 16% of its prime brokerage exposure was directly tied to AI storage chip stocks.