US markets brace for renewed funding pressure as leverage rises

US equity markets face renewed funding pressure as leverage in the system rises, with repo rates jumping nearly 89 basis points amid quarter-end pressures. Strategists at Morgan Stanley and Barclays warn that dealer balance sheet capacity is strained by surging equity financing demand, estimated at around $10 trillion in size, with leverage concentrated in a narrow group of tech and semiconductor stocks. The elevated use of leveraged ETFs and heavily concentrated speculative positioning could amplify any future market correction.