Asset managers dump $36 billion in S&P 500 futures amid Iran war shock

Tuesday 17 March 2026 - 09:20

By: Dakir Madiha

Asset managers dump $36 billion in S&P 500 futures amid Iran war shock

Institutional investors sharply reduced exposure to US equities in early March, liquidating $36.2 billion in S&P 500 futures in a single week, the largest notional selloff in more than a decade, as the war involving Iran disrupted markets and pushed oil prices higher.

Data from Goldman Sachs, based on the Commodity Futures Trading Commission’s Commitment of Traders report, showed asset managers cut positions between March 3 and March 10 at levels not seen since at least 2014. The move reflects a rapid shift toward risk reduction as geopolitical tensions intensified.

At the same time, short positions in US equity exchange traded funds surged. Goldman Sachs prime brokerage data indicated a 10 percent jump in a single session, the second largest daily increase on record. Weekly short positioning rose 8.3 percent, the sharpest increase since the tariff driven market shock in April 2025, according to Bloomberg.

Goldman Sachs said total short exposure across macro products, including index futures and ETFs, reached its highest level since September 2022. Hedge fund gross leverage approached record highs, driven largely by the expansion of short positions.

The repositioning was triggered by a sharp rise in oil prices linked to the conflict. Brent crude climbed from around $70 per barrel at the end of February to nearly $100 by mid March. Reports indicated US strikes targeted facilities on Iran’s Kharg Island, a key hub handling most of the country’s oil exports, although officials said infrastructure was not damaged. Both Brent and West Texas Intermediate crude moved above $100 for the first time since 2022.

Higher energy prices are tightening financial conditions and complicating the outlook for US monetary policy. Goldman Sachs’ US volatility indicator reached 9.72 out of 10 earlier in March, signaling elevated stress across equity markets even as major indices avoided a sharp collapse.

Analysts said the scale of the selloff could set the stage for a reversal. When positioning and sentiment drop simultaneously, markets can become overstretched on the downside, leaving limited room for further selling. A pullback in oil prices or easing tensions around the Strait of Hormuz could force investors to rebuild exposure quickly, triggering a short squeeze.

Goldman Sachs noted that investors are increasing hedging activity without fully exiting markets, with overall leverage near the top of its five year range. This combination of record short positions and high leverage leaves markets highly sensitive to shifts in sentiment and positioning dynamics.