Recently, the bearish sentiment has been heating up. According to the latest data, the average short position in US stocks has increased by 88 basis points over the past month, indicating a clear rise in shorting and hedging demand.

Looking at sectors, real estate, utilities, and other interest rate-sensitive areas have seen the most significant increase in short positions, suggesting that investors are betting "high interest rates will persist for a while" or are defending against valuation pressures in these sectors. In contrast, short positions in media entertainment and auto parts have actually declined, indicating that some of the crowded short positions are gradually loosening.

Ultimately, the market is now re-evaluating the uncertainties surrounding interest rates and economic growth. Short-term volatility is likely to intensify. But what truly determines the direction of the game is whether upcoming macroeconomic data can overturn the logic of the shorts. When the data is released, that will be the moment to see the real outcome.