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JPMorgan Says Hedge Funds Have Stepped Back From Tech — and the Tape Is Behaving Like It

A 30% premarket air pocket in SK Hynix, a flight to bitcoin and ether within crypto, and record-high indexes masking a falling Nasdaq 100 all describe a market with thinner shock absorbers.

August 6, 2026 Markets

The marginal buyer of tech just got smaller

JPMorgan strategists say some big hedge fund groups took heavy hits in the July tech selloff and may buy far less of those stocks going forward, which would leave the market more at the mercy of retail traders. That is a liquidity story as much as a positioning one: when the leveraged, price-insensitive-on-the-way-down cohort steps back, the same order flow moves prices further. SK Hynix offered the illustration, diving 30% in premarket trade in Seoul before recovering much of the loss — a round trip that says more about depth of book than about the company, even as a SocGen strategist argues the Korean shakeout is nearly done.

Crypto is consolidating into the two largest tokens

Bitcoin added about 0.9% over 24 hours to $64,700 while the broader CoinDesk 20 managed just 0.16%, with bitcoin and ether the only index members in positive territory. Altcoin open interest has fallen roughly 15% over the past month while bitcoin gained about 8%, and CoinMarketCap's Altcoin Season index slipped to 42/100. Plasma's Zaheer Ebtikar frames the divergence as structural: bitcoin has moved into capital-markets plumbing via ETFs, basis trading, institutional hedging and collateral, so that flow doesn't need a rally to justify itself, while most altcoins haven't made that transition and can't articulate how value accrues. Read alongside the hedge-fund retreat, both markets are showing the same instinct — crowd into what has a non-discretionary bid.

Index records are hiding the rotation underneath

Equity markets have climbed to record highs, but the composition is split: the Nasdaq 100 fell while the S&P 500 and Dow rose. Analyst revisions are scattering the same way, with targets raised on eBay for strong execution and Shake Shack on a margin beat, and cut on AppLovin for a gaming-ads growth slowdown and on Circle Internet by two separate shops — on valuation and on USDC growth concerns. Against that dispersion, S&P 500 companies are showing strong third-quarter guidance trends, which is the bull case for why index levels hold even as leadership churns.

Sources

Not investment advice.