S&P 500 Short Interest Hits 3.7% Record as AI Doubts Shadow Near-High US Stocks
Updated
Updated · Business Insider · Jul 21
S&P 500 Short Interest Hits 3.7% Record as AI Doubts Shadow Near-High US Stocks
3 articles · Updated · Business Insider · Jul 21
Summary
S3 Partners said short interest across S&P 500 stocks has climbed to 3.7% of free float, the highest level in its data going back to 2010.
The buildup reflects rising bets against expensive US equities as investors question AI spending economics, especially after memory and semiconductor stocks slid into a bear market this month.
Broader risks are adding pressure: US-Iran tensions and uncertainty over inflation could revive fears of Federal Reserve rate hikes if June's CPI relief proves temporary.
Positioning remains conflicted, with Bank of America finding 82% of fund managers call global chip stocks the market's most crowded trade while nearly half now see an AI bubble as the biggest tail risk.
Even so, investors increased allocations to US equities to the highest since December 2024, underscoring a bull market still near record highs despite growing skepticism.