Investors in the US high-touch flows remained cautious and selective last week, driven largely by hedge fund activity and short covering rather than fresh risk-taking. Despite supportive AI-related data points and a generally constructive market backdrop, long-only investors failed to meaningfully add exposure.

In Technology, semiconductor and hardware flows were muted, with investors failing to re-gross following the earnings reports from Broadcom and Dell. While sentiment around the AI theme remained constructive, selective buying was concentrated in large-cap and infrastructure software names rather than broad-based participation. Long-only investors used single-name strength to trim positions after sharp negative reactions to small- and mid-cap software earnings misses, including ASAN, PATH, and GWRE.

Healthcare attracted inflows into biotech as yields paused their recent move higher, while medtech and life sciences tools were notably better for sale. Financials experienced several squeeze-driven mornings during the week, but desk flows ultimately skewed toward selling into the close of the period.

Consumer flows largely tracked price performance, reinforcing a market that remains cautious and selective. Stock-specific reactions continue to outsize changes in underlying fundamentals, underscoring the dominance of positioning and sentiment in driving near-term price action.

Overall, hedge funds were the main drivers of buying last week, with long-only investors staying selective and failing to add meaningful exposure despite supportive market conditions. This highlights the ongoing importance of fundamental analysis and positioning in today’s market.