See the full story in the original article.
Original headline: It’s been a painful month for hedge funds. To turn it around, they are shorting U.S. stocks.
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Keywords
hedge fundsshort sellingSPYQQQ
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Related tickers and likely impact
QQQ
▼ Likely negativeInvesco QQQ Trust
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/22/2026 | 704.59 |
| Change that session | -2.84% |
SPY
▼ Likely negativeSPDR S&P 500 ETF
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/22/2026 | 764.02 |
| Change that session | -1.17% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Hedge Funds Are Shorting Stocks at Near-Record Levels
Goldman Sachs prime brokerage data shows hedge funds have built short positions in stocks to a near five-year high, while global fundamental long-short funds lost 2.9% through October 15 and suffered losses every trading day in that stretch. On October 22, the S&P 500 fell 1.21% to 7,663.43 and the Nasdaq Composite dropped 2.6%, even though most stocks rose as the selloff stayed concentrated in megacap tech. The Philadelphia Semiconductor Index lost over 6%, Meta fell 6.98% after its third-quarter report, and the 10-year Treasury yield dropped 19.3 basis points to 4.953%. Fundstrat's Tom Lee said the selloff is nearly over, while the article notes that a yield rebound, weak megacap results or a hawkish Fed would prove the shorts right. It also warns that rising prices could force short sellers to buy back shares in a short squeeze.
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The yield on the 10-year U.S. Treasury note has risen more than 1 percentage point this year, from 4.17% in early January to 5.31% in early October, before easing somewhat in recent weeks; this is the highest level since 2002. The author attributes the rise mainly to supply and demand for capital: governments are borrowing heavily to fund deficits, AI hyperscalers are issuing hundreds of billions of dollars in bonds to build data centers, and global capital is limited. Higher yields raise borrowing costs for consumers and businesses, which can weigh on spending and profits, and make bonds more attractive relative to stocks. The author argues that the yield surge reflects economic growth and that selling stocks to avoid risk now is a mistake, since markets have historically recovered after corrections. Investors who will soon need to draw cash from their portfolios, such as those near retirement, may need to be more defensive.
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