Goldman Sachs: Systematic funds are expected to shift back to buying U.S. stocks.

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Goldman Sachs’ trading division says that after cutting equity exposure to multi-year lows during the recent market sell-off, systematic investors are preparing to turn back to buying stocks.

In a report sent to clients on Monday, Goldman Sachs stated that these so-called “fast money” funds—including commodity trading advisors (CTAs) and volatility-targeting strategies—sold about $240 billion in global equities during the past month’s market downturn. However, this wave of selling appears to be fading: traders expect this group could turn to net buying of about $55 billion over the next month, with about $20 billion likely to flow into U.S. stocks.

Goldman expects this shift to be gradual, with buying strength over the next week at only about $5 billion, so the short-term impact may be limited.

Goldman Sachs managing director Lee Coppersmith wrote: “This mechanical buying is improving, but it’s more like a tailwind in the middle of the month rather than immediate support.”

This shift could mean the current U.S. stock market sell-off is nearing a turning point. Previously, investor sentiment was pressured by surging oil prices caused by the Iran conflict, with the S&P 500 falling about 9% from its all-time high. While U.S. stocks have shown initial signs of rebounding recently, the outlook for the conflict remains highly uncertain.

The strength of the short-term rebound will determine how aggressively these funds add positions. Goldman’s models show that if the S&P 500 rises by about 8% over the next month, systematic funds could increase global buying to $220 billion, with more than half flowing into the U.S. market. Conversely, if the index drops another 10%, it could trigger an additional $110 billion in selling.

Key technical levels may guide the market’s direction. Goldman’s Paul Leyzerovich noted that the S&P 500’s 6720–6740 range is a crucial “re-entry zone”; at that point, short- and medium-term trend signals would turn positive, possibly accelerating inflows to trend-following strategies. The index is currently near 6600.

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