J.P. Morgan Flags Hedge Fund Leverage After July Sell-Off

J.P. Morgan's Mid-Year Outlook 2026 flags hedge fund leverage as an ongoing risk. In July, forced deleveraging — funds selling assets to cut borrowed exposure — drove the MSCI World Semiconductors Index down 13.2%. Global hedge funds gave up nearly 3% of gains, per Reuters citing JPMorgan. The drop reflects crowded, leveraged AI bets, not weaker AI fundamentals.