By Nell Mackenzie

LONDON, May 11 (Reuters) - Hedge funds finished last week net long U.S. stocks for the first time since the Iran ceasefire, wagering asset prices would rise, said two Goldman Sachs prime brokerage notes to clients, seen by Reuters on Monday.

Stocks have rallied in recent weeks and the S&P 500 is at record highs .SPX, helped by strong earnings and the AI boom.

Market reaction to the Iran war bore similarities to last year's tariff announcements and the collapse of Silicon Valley Bank in 2023, one of the notes said.

"History shows that the move off the low lasted longer (and more powerfully) than most anticipated," it added.

Stocks turned lower on Monday after President Donald Trump's swift rejection of Iran's response to a U.S. peace proposal sent oil prices higher.

Here's what stock trading hedge funds did last week before these developments, said Goldman:

• Gross leverage, hedge funds' overall market exposure and risk, rose to a record high, on a 5-year basis.

• Global equities were, on balance more bought than sold last week.

• Buying was in single stocks and equities at an index level.

• Call option volumes "exploded," cheaper derivative bets that give the holder the option at certain price to buy.

• Asian emerging and developed market stocks saw the largest buying in a month.

• Allocations to Asia stocks stand at record levels, since Goldman began tracking these trades.

• Financials including banks and insurance companies were the most net bought sectors last week.

• Despite last week's buying, hedge funds' exposure to the sectors remains at a 5-year low.

• Hedge fund wagered bets that every stock sector would rise, except for energy and health care.