Bearish ETF Alarms Blare After a $373 Million Short Bet

A group of ETF traders are betting against a spirited rebound in the stock market, as they pay up for short positions and withdraw money from bullish strategies.

The ProShares Short S&P500 (ticker SH), a $1.8 billion vehicle that seeks to deliver the opposite of the benchmark’s daily performance, saw a record $373 million inflow during the latest session for which data is available. Meanwhile QLD — a fund that aims to offer two times the Nasdaq 100’s returns every day — was hit with a $277 million redemption Monday, the most since the start of April. Just four months into 2025, the fund is on pace for its worst year of outflows since 2010.

“This is a sign that investors are getting more bearish,” said Matt Maley, chief market strategist at Miller Tabak + Co.

Alarms in the ETF market are blaring as the S&P 500 endures another roller coaster week, with the index rallying Tuesday to nearly wipe out Monday’s loss, after Bloomberg News reported closed-door comments by Treasury Secretary Scott Bessent saying the tariff standoff with China is unsustainable.

Since the stock market hit a peak two months ago, ETF allocations overall have migrated away from economically sensitive markets like small-cap companies and into haven trades like gold, according to Strategas data. At the same time, Bank of America clients sold equity ETFs last week for the first time in seven, with most sectors seeing outflows.