Hedge fund leverage surged to 294% last week, marking the highest level in five years, according to data from Goldman Sachs. This increase reflects hedge funds heavily investing in U.S. and European financial stocks, including banks, insurers, and trading firms. The leverage spike followed the Federal Reserve's decision to keep interest rates steady. Investors have also reached historically high equity allocations, comparable only to levels seen before the Dot Com Bubble burst. The rise in hedge fund leverage and equity exposure indicates a strong market appetite despite ongoing risks. Notably, this leverage increase occurred shortly before U.S. military actions targeting Iran's nuclear sites.