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Short interest in the S&P 500 index has climbed to approximately 3.7% of its free float—nearing its highest level since 2010—prompting market commentator The Kobeissi Letter to warn that “conditions for a short-squeeze are rising”.
As traders build heavy short positions against American equities, these elevated short levels across key benchmarks are creating significant potential for a rapid upward market rally.
Surging Bearish Bets Across US Equities
Data from S3 Partners and Bloomberg highlights that “bearish bets on US stocks are surging” steadily across major equity indices. Short interest in the broad-market Russell 3000 index has reached approximately 6.1% of its free float, hovering near an all-time high as both metrics have climbed steadily since the start of 2025.
Pessimistic sentiment is even more pronounced across the broader stock market. Short interest across all NYSE-listed equities expanded to a record 9.0% of shares outstanding in late June.
To put this figure into historical context, short interest peaked at roughly 5.0% during the 2008 Financial Crisis and about 6.0% during the 2020 COVID-19 pandemic, placing current bearish positioning far above past major crisis levels.
SPY ETF Reflects Mounting Short Positions
This macro trend is clearly visible in the flagship State Street SPDR S&P 500 ETF Trust SPY. Benzinga’s latest short interest report shows shorted shares in SPY rose from 102.34 million to 109.82 million during the settlement period ending June 30.
With SPY closing at $748.28 as of Tuesday and registering an average daily volume of 64.37 million shares, the ETF carries a days-to-cover ratio of 1.71 days.
This means short sellers would require nearly two full trading days to repurchase shares and close out their positions without sending the stock sharply higher, further amplifying the risks of a potential short squeeze.
How Have Markets Performed In 2026?
The S&P 500 index has advanced 9.49% year-to-date. Similarly, the Nasdaq Composite index was up 11.20%, and the Dow Jones gained 7.94% YTD.
The SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 and Nasdaq 100, respectively, were higher in premarket on Wednesday. The SPY was up by XX% at $XXX, while the QQQ advanced by XX% to $XXX.
Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust DIA, was XXX% higher at $XXX on Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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This article S&P 500 Short Interest Nears Highest Since 2010 — Market Commentator Warns 'Conditions for a Short-Squeeze Are Rising' originally appeared on Benzinga.com.
