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(Bloomberg) -- There is one nook in the market that took President Donald Trump’s tariff threats seriously last week: professional speculators.

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Hedge funds dumped US equities for a fifth straight week, according to data from Goldman Sachs Group Inc.’s prime brokerage, as the AI threat from China’s DeepSeek and Trump’s promise to impose steep levies on America’s biggest trading partners rippled through markets. The funds ramped up short sales in single stocks and long sales in macro products, the data show.

The moves by big money managers appear to have rightly anticipated a broad market drawdown as Trump moves to slap 25% tariffs on large swaths of Canadian and Mexican goods. Futures on the S&P 500 slumped 1.7% as of 8 a.m. in New York, after the cash index dropped 1% last week. Goldman’s chief equity strategist, David Kostin, said US stocks could slump 5% if the tariffs remain in effect.

The bet wasn’t a layup given Trump’s capriciousness when it comes to using the threat of tariffs. For months he had promised them on Day 1 of is administration before announcing a delay to Feb. 1. The levies are slated to go into effect at midnight.

Retail investors, for example, seem to have wagered the president wouldn’t risk the economic and market impact that many predict tariffs will bring. That group poured $2.1 billion into US stocks on Friday, according to an analysis by Emma Wu, JPMorgan Chase & Co.’s global quantitative and derivatives strategist. An inflow of more than $2 billion has occurred just nine times in the past three years, with five of those instances already occurring in 2025.

Hedge funds net sold nine of 11 sectors in the S&P 500, with health care and real estate seeing inflows. In notional terms, consumer discretionary, industrials, financials, energy, communication services and information technology were the most net-sold groups, Goldman’s data show.

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