An unprecedented wave of institutional selling is pushing U.S. stocks to a dangerous tipping point—potentially triggering a short squeeze if there is a geopolitical turnaround, or leading to a deeper decline as tensions continue to worsen.
Data from Goldman Sachs' futures trading desk shows that from March 3 to 10, asset management institutions net sold $36.2 billion in S&amp;P 500 futures, marking the largest single-week reduction in nominal value in over a decade. Goldman Sachs' Robert Quinn pointed directly to the Iran war and the accompanying surge in oil prices as the direct catalyst for this rapid institutional withdrawal.
Meanwhile, data from Goldman Sachs' ETF trading desk indicates that on Thursday, the short positions in U.S.-listed ETFs increased by 10% in a single day, marking the second-largest single-day increase in Goldman Sachs' history. The overall short exposure in macro products has risen to its highest level since September 2022. The simultaneous selling in futures and shorting in ETFs has made the market's extreme pressure situation very clear.
However, the ultimate direction of this game largely depends on the evolution of the geopolitical situation. Goldman Sachs' U.S. trading head John Flood noted that investors are still hoping that the widespread uncertainty caused by the Iran war will dissipate quickly, but the time window for this expectation is narrowing—if there is no positive progress in the next two weeks, &#34;from the perspective of stock indices, we will face problems.&#34;
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<h2>Institutions Net Sold $36.2 Billion, S&amp;P Futures Experience Largest Single-Week Sell-off in a Decade</h2>
Data from Goldman Sachs' futures trading desk reveals the historic anomalies in institutional behavior this week. During the week of March 3 to 10, asset management institutions net sold $36.2 billion in S&amp;P 500 futures, surpassing any single-week sell-off record in nominal terms in over a decade.
Robert Quinn highlighted the core driving force behind this rapid retreat in his report: the ongoing escalation of the Iran war and the simultaneous surge in oil prices resonated, catalyzing a swift exit of institutional funds. Notably, while institutions were aggressively selling futures, the attitudes of other non-dealer market participants were divided; leveraged funds maintained relative resilience amid ongoing volatility in the commodity markets and did not exhibit the same intensity of directional betting.
<h2>ETF Shorting Hits Record Highs, Short Exposure Climbs to Three-Year Peak</h2>
In the same week of historic futures sell-offs, Goldman Sachs' ETF trading desk also recorded a set of shocking data. On Thursday, the short positions in U.S.-listed ETFs in Goldman Sachs' commodity brokerage accounts increased by 10% in a single day, marking the second-largest single-day increase in Goldman Sachs' history, second only to the 16% recorded on April 2, 2025.
This pattern of resonance between futures and ETFs has pushed the overall short exposure in macro products to its peak since September 2022. This comparison is particularly significant—April 2025 was one of the days when the market experienced the most severe policy shocks to date, and the current intensity of ETF shorting is now closely approaching that level, reflecting the degree of current market sentiment suppression
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/7581c6ca-c483-4fde-b45f-05bebe0561e3.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/7581c6ca-c483-4fde-b45f-05bebe0561e3.png"/>
<h2>Short Squeeze and Crash, Existing on Both Sides of the Critical Point</h2>
Despite the unprecedented scale of this round of position reduction, Goldman Sachs reminds clients that institutional investors' net long positions remain at the 71st percentile over the past two years and have not been fully cleared. This structural characteristic indicates that the market is currently in a highly sensitive balance state, with the direction not yet firmly established.
John Flood points out that large-scale de-risking operations (benefiting from the synchronized surge of ETF shorting, overall leverage has not fully contracted) combined with a rapid deterioration in sentiment—where sentiment indicators and institutional S&amp;P futures positions are almost synchronized point by point—means that it only takes one trigger point to potentially ignite a fierce short squeeze, creating a perfect storm for the &#34;weak hands&#34; institutions that previously sold off heavily to scramble to chase prices higher.
These two entirely different outcomes ultimately point to the same key variable: the trajectory of the Iran war. John Flood states that investors are still hoping for the widespread uncertainty caused by this conflict to dissipate quickly. Once signs of easing in the situation appear, the accumulated massive short positions will become the fuel to ignite a market surge; however, the longer the market delays, the greater the vulnerability, ultimately breaking through the critical point and resulting in an unavoidable downward shock.
&#34;The market hopes to see some signals of resolution in the next two weeks,&#34; John Flood warns:
<blockquote>
&#34;But if this situation continues without any positive progress, then from the perspective of stock indices, we will face problems.&#34;
</blockquote>

GS-C

Due to the impact of the Iran war and soaring oil prices, U.S. institutions experienced the largest weekly sell-off in a decade. According to Goldman Sachs, S&P 500 futures saw a net sell-off of $36.2 billion, setting a record for over a decade; at the same time, ETF short exposure surged to a three-year high. This unprecedented extreme de-risking operation has placed the market at a dangerous tipping point: if there is no improvement in the geopolitical situation within two weeks, the stock market will face a crash; conversely, the massive short positions could ignite an extremely fierce short squeeze

- Institutions have sold a record $36.2 billion in S&P 500 futures, marking the largest weekly withdrawal in over a decade, largely driven by the Iran conflict and rising oil prices.  
- Concurrently, short positions in U.S.-listed ETFs surged 10%, indicating a peak in bearish sentiment not seen since September 2022.  
- The market's trajectory hinges on geopolitical developments, with investors hoping for a resolution within two weeks to avert significant downward pressure on stock indices.

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The market is at a "breaking point"! Goldman Sachs reveals: This week, institutional selling and shorting of U.S. stocks reached "historic levels."