Did quarterly rebalancing by institutions cause continued weakness in US AI stocks? A quick breakdown of the $165 billion selling pressure.

According to BlockBeats, on June 29th, several analysts recently warned that US stocks will face $165 billion in selling pressure from large institutions at the end of June due to quarterly rebalancing needs. According to JPMorgan's analysis, the selling pressure will primarily come from the following five institutional groups: US fixed-income pension funds: managing approximately $9.6 trillion in assets, expected to contribute approximately $55 billion in equity sales (due to their relatively loose rebalancing discipline, they typically only perform partial rebalancing). Japan's Government Pension Investment Fund: managing approximately $1.9 trillion in assets, expected to sell approximately $60 billion in global equities (while simultaneously buying bonds). Norway's sovereign wealth fund: managing approximately $2.1 trillion in assets, expected to sell approximately $40 billion in equities to return to its target allocation at the end of 2025. The Swiss National Bank: expected to sell approximately $25 billion after an increase in equity weighting (this will decrease if the target weighting is adjusted upwards). Balanced mutual funds: With a size of approximately $4 trillion, stricter monthly rebalancing discipline may lead to a small net purchase of equities this month (approximately $15 billion), partially offsetting the aforementioned selling pressure. Based on past publicly available records, institutional selling pressure is likely concentrated in the last few days of the quarter. Some of this capital will be concentrated in pre-market trading, resulting in significant selling pressure at the close. BlockBeats Note: Quarterly rebalancing is primarily due to institutions having clear policy asset allocation targets, such as 60% equities and 40% bonds. A significant rise in equities during the quarter can cause the equity weighting to exceed the target, triggering a rebalancing signal. Therefore, the recently surging AI-related US stocks will be the first targets for these institutions to reduce their holdings.