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Short Sellers Are Being Forced to Fold as the S&P 500 Surges

  • Most-shorted stocks lead market, jumping almost 6% as a group
  • Hedge funds, CTAs added bearish bets when S&P 500 hit new lows
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One by one, short sellers are being forced to capitulate as market expectations grow for a slower pace of central bank tightening.

Whether in stocks or bonds, bearish bets are being dealt a blow as US data begin to reflect the fallout from the Federal Reserve’s aggressive rate hikes. A dovish pivot by the Reserve Bank of Australia on Tuesday is also fanning speculation that policy makers may be about to soften their hawkish stance.