Systematic funds have turned net short on U.S. stocks for the first time in over a year, indicating a cautious market sentiment despite a recent rebound in equities. The S&P 500 Index (SPX) remains near its highs, with a notable bounce in Commodity Trading Advisor (CTA) positioning, which could suggest a bullish outlook if these funds continue to increase their risk exposure. However, institutional investors are selling the so-called 'Magnificent 7' stocks—comprising major technology companies—at a record pace, with hedge funds' net exposure to these stocks dropping to a two-year low. This selling activity surpasses even the pace observed during the 2022 bear market, reflecting a broader trend of hedge funds being the least long on U.S. stocks in at least five years, according to Goldman Sachs.