Hedge funds have significantly increased their short positions in the stock market, with a notable $25 billion increase in short equity futures exposure over the last three Commitments of Traders (COT) reports, marking the largest increase in at least a decade. This surge in short selling has driven hedge fund gross leverage to new record levels, according to Goldman Sachs. The median short interest in S&P 500 stocks has risen to 2.3% of market cap, surpassing its long-term average for the first time since the 2021 short squeeze. This shift reflects a broader trend of hedge funds betting against the market, particularly in sectors like regional banks and biotechnology, with ETFs such as $KRE and $XBI experiencing significant short interest. Notable individual shorts include Lucid, Birkenstock, Choice Hotels, and Moderna. Despite the pain associated with shorting U.S. stocks, as noted by hedge fund veteran Edouard de Langlade, hedge funds continue to increase their bearish positions. This comes amidst a backdrop where hedge funds have also adjusted their portfolios, reducing exposure to the so-called 'Magnificent Seven' tech stocks while increasing investments in Chinese companies listed in the U.S. Additionally, Steve Schurr, formerly of the FT and Kynikos Associates, has been poached by Millennium with a $100mn compensation package.