The Wall Street Journal reported investors are bracing for the softest U.S. profit growth in years, pinched by collapsing oil prices and a strong dollar.

The Journal notes that over the past few months, the Dow Jones Industrial Average and S&P 500 have carved out new record highs, while suffering frequent setbacks.

The Journal said, based on a confidential memo Morgan Stanley recently sent to clients, some prominent hedge funds are cutting back their exposure to stocks and reducing their use of borrowed money to amplify their bets.

To view the full Wall Street Journal report, click here.