US consumer sentiment and institutional investor positioning have turned markedly bearish amid growing recession concerns. In April 2025, 72% of Americans believed a recession was likely within the next 12 months, the highest level in two years. Consumer expectations of their family’s financial situation fell to the lowest point since 2022, while pessimism about business conditions reached levels not seen since the financial crisis. Nearly half of Americans (49%) anticipated lower stock prices over the coming year, the highest share in 14 years, coinciding with a roughly 5% year-to-date decline in the S&P 500. Institutional investors have also adopted a highly bearish stance: hedge funds’ long-to-short ratio on US equities dropped to its lowest in nine years, and their long/short ratio on the so-called Magnificent 7 stocks fell to approximately 2.5 times, the lowest ever recorded. Hedge funds’ short positions on US equities have surged to levels last seen during the 2022 bear market, according to data from Unlimited, which monitors 3,000 global hedge funds managing about $5 trillion in assets. Additionally, CEO confidence in the US economy over the next 12 months declined to its lowest level in 13 years, signaling potential upcoming layoffs as companies prepare for reduced demand. Labor market pessimism has also intensified, with 32% of Americans expecting fewer jobs in the next six months, a share only previously observed during recessions. The American Association of Individual Investors (AAII) sentiment survey showed bearish sentiment remaining above 50% for a record 10 consecutive weeks, reaching 59.3%. Overall, these indicators reflect heightened economic uncertainty and widespread concerns about a potential downturn in the US economy.