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2026-05-29 01:45:54
Goldman Sachs traders believe an unpopular sector could trigger a short squeeze to fuel the next rally in US stocks. The US stock market bull run may be poised for its next surge with the support of an unexpected ally – short sellers. According to data tracked by S3 Partners LLC dating back to 2010, total short positions in US and Canadian stocks have surged by nearly $100 billion since late April, reaching a record high of $2.13 trillion. Furthermore, data from Goldman Sachs' prime brokerage division shows that the median short position in S&P 500 components has risen to 3% of market capitalization, the highest since the end of 2011. Goldman Sachs' trading division believes the current situation is a turning point. The next rally in US stocks is more likely to be driven by a short squeeze, forcing investors to buy stocks outside of the mega-cap tech stocks that have led the two-month rally. “We do see the market potentially moving higher from here, but the next rally is more likely to be driven by a squeeze in unfavored sectors and influenced by momentum-driven risks,” wrote the team led by Gail Hafif, Brian Garrett, and Lee Coppersmith.
