Key Takeaways
- U.S. equities saw net selling last week, with hedge funds and private clients driving outflows, while institutional investors continued a seven-week buying streak.
- President Donald Trump announced a 100% tariff on branded and patented pharmaceutical imports, effective October 1, 2025, potentially impacting Indian exporters despite generics being initially excluded.
- Macro hedge fund founder Jimmy Lim is reportedly ceasing to manage money for Millennium Management, having previously spun out to establish Modular Asset Management.
- The S&P 500 (SPX) has experienced a pullback, falling for a third consecutive day, despite stronger-than-expected Q2 GDP growth.
U.S. equity markets experienced a notable pullback last week, with clients turning net sellers for the first time in three weeks, according to Bank of America Securities. The selling was primarily driven by hedge funds and private clients, marking the first sales by hedge funds in three weeks. Outflows from single stocks amounted to $1.6 billion, though this was partially offset by $1.2 billion in inflows into equity exchange-traded funds (ETFs). In contrast to broader market sentiment, institutional investors extended their buying streak to seven weeks. The S&P 500 (SPX) has fallen for a third straight day, pulling back approximately 1.5% in recent days, yet remains up nearly 12% for the year.
In trade policy news, President Donald Trump declared a 100% tariff on branded and patented pharmaceutical imports, set to take effect on October 1, 2025. This measure aims to incentivize pharmaceutical companies to establish manufacturing facilities within the United States. While generic medicines, which constitute India's primary pharmaceutical export to the U.S., are technically excluded from the tariffs, the announcement has sent ripples through India's $20 billion pharmaceutical industry. Indian exporters, including major players like Sun Pharma (SUNPHARMA), Dr. Reddy's Laboratories (DRL), Cipla (CIPLA), Lupin (LUPIN), and Aurobindo Pharma (AUROPHARMA), face potential disruption as they supply nearly 40% of U.S. generics. The U.S. pharmaceutical market is the world's largest, with imports totaling $212.67 billion in 2024.
Separately, the financial industry is observing a significant personnel development as Jimmy Lim, a prominent macro hedge fund founder, is reportedly stepping back from managing money for Millennium Management. Lim is known for co-founding Modular Asset Management, an Asian macro hedge fund based in Singapore, which he spun out of Millennium Management in January 2020. Modular Asset Management currently manages nearly $1 billion in assets. Millennium Management, a global, diversified alternative investment firm founded in 1989 by Israel Englander, boasts over $79 billion in assets under management as of September 2025.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.