Investors Flee Market as October Marks Worst Performance in Five Years

The stock market is experiencing its worst October in five years, causing investors to exit the market and adopt a defensive posture. Professional managers have reduced their equity exposure to levels last seen during the 2022 bear market, while hedge funds have increased single-stock shorts for 11 consecutive weeks. Investor sentiment remains low, with dip buyers scarce and the S&P 500 falling multiple times in October. The Nasdaq 100 is on track for its steepest October loss since 2018. However, some strategists see the current gloom as a positive, suggesting the potential for a year-end rally if sentiment flips.