Short sellers who bet on a stock market downturn in 2023 lost nearly $180 billion U.S.
Data from S3 Partners shows that short sellers on Wall Street lost $178 billion U.S. over the past year as the major indices in America rallied following a bear market in 2022.
The Dow Jones Industrial Average has reached record highs in recent trading sessions and the S&P 500 and Nasdaq exchanges are at or near 52-week highs.
Short sellers bet that stock prices will go down in the near-term and are known as “bears” on Wall Street for their pessimistic outlook.
However, the bear case did not prove out over the past year, with the technology laden Nasdaq index having gained 44% and the S&P 500 up 24%.
The top six stocks that short sellers lost money on are all part of the so called “Magnificent Seven” technology stocks, with only Alphabet (GOOG / GOOGL) not on the list.
As excitement related to artificial intelligence (A.I.) gripped markets over the past year, stocks of companies such as Nvidia (NVDA) and Meta Platforms (META) rose more than 100% each, putting short sellers on the defensive and costing them billions of dollars in losses.
Since the U.S. Federal Reserve signalled earlier in December that it foresees three interest rate cuts in 2024, the market rally has broadened out beyond technology stocks, causing further losses for short sellers on Wall Street.
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