Bets against the stock market are at all-time highs, as investors doubt the S&P 500’s months-long rally can survive sharpened AI fears and the Iran war’s threat of renewed inflation.
The total amount currently bet against shares of the S&P 500 companies recently hit $1.4 trillion, about 3.7% of the float, the highest since at least 2010, according to data provider S3 Partners. Bets against AI companies, in particular, are creeping up — nearly one-third of SpaceX’s shares and a quarter of CoreWeave’s are sold short — but the bearishness is bleeding into companies exposed to consumer spending, like Dave & Buster’s (43%), Norwegian Cruise Line (18%), Molson Coors (18%), Live Nation (15%), and Wynn Resorts (12%).
It’s been a punishing… decade… for bears, which have seen bad news fade away in an unrelenting wave of buying. The bull market has chased out two of the most famous shortsellers, Jim Chanos and Nate Anderson. But there are signs this market indigestion is getting worse: Nobody has caught the falling knife of IBM’s earnings whiff. And a wave of share sales from anticipated AI listings and tech companies struggling to keep up with their AI bills will further test the market’s appetite.
