Beware ‘the mother of all short squeeze’ brewing on Wall Street

Hedge funds are sitting on their largest short book against US stocks since the 2022 bear market, setting the scene for an explosive rally in the world’s biggest sharemarket if there is a sudden de-escalation in the Middle East.

Speculative investors have been upping their bets against Wall Street since the Iran war broke out just more than two weeks ago. The war has pushed oil prices above $US100 a barrel and threatens to reignite inflation. Investors are also looking to make money from artificial intelligence disruption.

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