US equities positioning, flows, and thematic market observations: AI-linked themes led a higher US equity week, while Goldman Sachs flags rate-sensitive Non-Profitable Tech as vulnerable.

Overview

This weekly US-equity market and positioning update describes AI-driven leadership amid rising-rate and geopolitical pressures. Goldman Sachs sees reduced systematic selling risk for broad equities, while expressing a bearish tactical view on rate-sensitive Non-Profitable Tech.

Core views

US equities finished higher despite a sharp rise in rates, oil-price volatility and US-Iran tensions. The S&P 500 gained 1.2% for the week, while the Nasdaq 100 rose 3.25% and the Russell 2000 fell 0.68%. AI Inference Chips, AI Semis, Agentic AI and Optical Networks were the leading thematic baskets, gaining 7.03%, 6.80%, 6.31% and 6.22%, respectively. In contrast, Consumer Inertia fell 4.54%, Geopolitical Risk declined 4.23%, and Oil fell 3.62%. META’s Muse release was a central micro catalyst: Meta shares rose about 11% on Monday, Muse exceeded 902,000 downloads in its first six days, and the High Beta Momentum basket extended to a nine-day winning streak and returned 6.61% for the week. Prime-brokerage data showed overall de-risking but a continued rotation into technology. US equities were net sold, with macro products accounting for 57% of net dollar selling and single stocks 43%; single-stock short selling was the largest in three months. Seven of 11 sectors were net sold, led by Communication Services, Health Care, Energy and Staples, while Information Technology and, to a lesser extent, Real Estate were net bought. Hedge funds sold Health Care for a sixth consecutive week, with six-week selling at the 98th percentile of the past decade and this week’s degrossing at the 99th percentile over five years. Biotech’s long/short ratio fell to 2.84 from a five-year high of 5.36 in December 2025. By contrast, Information Technology was net bought for a fourth straight week, led by Semiconductors and Semiconductor Equipment; Tech gross and net allocations reached 20.8% and 20.4% of the US Prime book. The desk argues that futures positioning has become less of a technical headwind. Institutional net long exposure in US index products fell from a historical-record 48% of total open interest in May to 36% through mid-September. S&P futures institutional length remained above average on a normalized historical basis, but was only at the 14th percentile on a one-year ranking. Goldman Sachs also models global equity net length among CTA/systematic investors declining from about $145 billion in August to about $70 billion currently. Having estimated that CTAs sold nearly $75 billion of global equities in the preceding month, the desk’s current one-month expectation is for nearly $25 billion of buying; its baseline does not anticipate further systematic sales. Options activity reflected enthusiasm for agentic AI amid relatively light equity positioning. NDX recorded its third-largest one-month put-call-skew decline on record and its first record close since June, while the five-day average ratio of five-delta to 25-delta calls approached three-year highs. The desk notes that AI-related volatility has not meaningfully reset higher despite the Muse-driven disruption and says it prefers additional upside exposure through options in names positively skewed to AI-commerce secular growth. Clients continued adding META upside-option exposure after its spot-price rally. At the same time, investors used short-dated IWM options as a hedge against rates and oil, and the pension model estimated $32 billion of US equity selling into month-end—$10 billion monthly and $22 billion quarterly—at the 95th percentile of absolute estimates over three years. The report’s clearest tactical bearish call is to short Non-Profitable Tech (GSXUNPTC). US 10-year yields had risen for seven consecutive months, tied for the longest streak in 50 years, and investors were considering downside risk should the yield approach 6%. The basket is historically among the most rate-sensitive equity segments, although that relationship weakened over the prior year amid retail participation and solid nominal growth. With the 10-year yield up more than 100bp, GSXUNPTC outperforming the S&P 500 by more than 20 percentage points over the year, and the basket already down 11.8% this month, the desk considers the short setup compelling and notes a sharp year-to-date decline in retail participation. Sector observations were uneven. Financials underperformed the S&P 500 by roughly 3% as investors weighed the consequences of an agentic economy for consumer financial-services touchpoints and money movement, the implications of tokenization for US market structure and incumbent exchanges, and rising-rate pressure on growth and capital-markets activity. Healthcare Tools continued to rise, with GSHLCTOO up 82% since May on improved growth-visibility commentary, while AI drug discovery drew substantial generalist interest despite more specialist skepticism. SMID biotech remained under positioning and news-flow pressure; upcoming Medicare STARs results were identified as a key near-term managed-care event. The coming week includes OpenAI Dev Day, Micron earnings, PCE, ISM manufacturing, payrolls and several investor days; the S&P implied move through October 2 was 1.27%, while markets priced a 66% probability of an October rate hike versus 53% one week earlier.

Analysis framework

The desk combines weekly index and thematic-basket performance with Prime Services client flows, hedge-fund positioning, futures open-interest measures, CTA trend-flow simulations and options-skew observations. It then links macro conditions—especially yields, oil and geopolitical headlines—to sector and thematic implications and identifies upcoming events that could affect positioning.

Methodology notes

• Quantitative, Factor, and Portfolio Theory

  Prime Services flow and positioning analysis

  The report uses aggregated client trading, leverage, long/short ratios and sector allocations to identify where investors are adding or reducing equity risk.

• Quantitative, Factor, and Portfolio Theory

  CTA/trend simulated flow expectations

  The desk models systematic investors’ recent equity selling and conditional one-month buying or selling expectations to assess whether trend-following flows may become a market headwind or support.

• Event-Driven and Behavioral FinanceFund-Flow and Positioning Analysis

  Options positioning and skew analysis

  Put-call skew, call-wing demand, gamma exposure and implied-volatility percentiles are used to gauge investor demand for upside participation and downside hedging.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• META

  Muse-driven AI-agent adoption was a focal catalyst for momentum and continued upside-option demand.

  Strengths

  Muse led US Apple App Store and Google Play charts, exceeding 902,000 downloads in its first six days.

  Comparison

  META shares rose about 11% on Monday, its best day since April 2025.

• Non-Profitable Tech (GSXUNPTC)

  The desk identifies the basket as especially vulnerable to sustained higher interest rates and advocates a short position.

  Weaknesses

  Historically rate-sensitive; the basket began underperforming, falling 11.8% this month.

  Comparison

  Outperformed the S&P 500 by more than 20 percentage points over the past year despite a 100bp-plus rise in the 10-year yield.

  Risks

  Its prior rate correlation broke down amid retail participation and solid nominal growth.

Key data

• S&P 500 weekly performance+1.2%US equities rose for the week.
• Nasdaq 100 weekly performance+3.25%Outperformed the S&P 500 during the week.
• AI Inference Chips weekly performance+7.03%Top thematic-basket performer; YTD gain was 111.50%.
• US index institutional net length36% of total open interestDown from 48% in May through mid-September.
• CTA/systematic global equity net length~$70bnGoldman Sachs estimates this was down from roughly $145bn in August.
• US Fundamental L/S gross and net leverage210.6% / 48.6%Gross rose 1.2 points week on week; net fell 1.2 points.
• Non-Profitable Tech monthly performance-11.8%The basket had begun to underperform the market this month.
• Month-end pension-model equity flow$32bn to sellComprises $10bn monthly and $22bn quarterly estimated selling.

Impact & implications

The desk views lighter systematic positioning as making the technical equity backdrop more favorable than earlier, while AI-related leadership continues to attract flows and upside-option demand. It nevertheless highlights rate, oil and geopolitical sensitivity, sees particular downside vulnerability in Non-Profitable Tech, and notes that financials and healthcare face distinct event and structural uncertainties.

Risks

• Higher oil prices, elevated Treasury yields and geopolitical developments could weigh on risk assets.
• A move in the US 10-year yield toward 6% is cited as a potential downside scenario for equities, particularly Non-Profitable Tech.
• Financials face uncertainty around agentic AI, tokenization and the effect of higher rates on growth and capital-markets activity.
• SMID biotech remains exposed to negative news flow, challenging macro conditions and continued positioning pressure.

What to watch

• OpenAI Dev Day on Tuesday and Micron earnings on Friday.
• US PCE, ISM manufacturing data and nonfarm payrolls.
• The market-implied probability of an October rate hike, which stood at 66%.
• Medicare STARs results, expected around the back half of the second week of October based on precedent.
• Earnings from JEF and FDS, followed by large-bank results roughly three weeks later.