Hedge funds have net sold U.S. equities for the second consecutive week, with short sales outpacing long buys at a ratio of 2.5 to 1, according to Goldman Sachs. This trend is attributed to a collapse in funding spreads, which have dropped from a record high of 227 basis points to 16 basis points below the Federal Funds rate. Additionally, the funding spread—a measure of demand for long exposure through equity derivatives—has decreased from about 130 basis points in late December to around 70 basis points, marking the lowest level since August. The decline in funding spreads indicates significant de-leveraging among institutions, suggesting aggressive selling and a shift in investor positioning following the recent Federal Reserve meeting. The selling pressure has also extended to energy stocks, with last week's notional long selling in U.S. energy being the largest in over eight years.