Short sellers turned up the heat on healthcare stocks in February, with Moderna (NASDAQ:MRNA) taking the top spot as the most shorted name. Its short interest jumped to 13.19%, up from 11.84% the prior month. Despite the pressure, the healthcare sector (XLV) has held up, rising 4.55% year-to-date even as the broader S&P 500 (SPY) has slipped 6.12%. ResMed (NYSE:RMD) and DaVita (NYSE:DVA) followed closely in short positioning, while Eli Lilly (NYSE:LLY) was the least shorted with just 0.85% of its float bet against. Moderna, still struggling post-pandemic, posted a sharp revenue drop and a bigger-than-expected loss, leaving investors questioning its long-term growth prospects.
Meanwhile, markets staged a relief rally on Friday, snapping back from weeks of selling. The Dow (DIA) jumped 616 points, the S&P 500 climbed 1.76%, and the Nasdaq (NASDAQ:QQQ) surged 2.12% at 12.24pm, with tech stocks leading the charge. Nvidia (NASDAQ:NVDA) soared over 4.5% at 12.26pm, while Tesla (NASDAQ:TSLA), Meta (NASDAQ:META), Amazon (NASDAQ:AMZN), and Apple (NASDAQ:AAPL) all posted gains. The rebound came as fears of a government shutdown eased, but economic concerns linger. Consumer sentiment unexpectedly dropped to 57.9, well below expectations, reflecting inflation worries and rising Treasury yields. With the S&P 500 now officially in correction territorydown over 10% from its peakinvestors are weighing whether this rally has legs or if it's just a temporary bounce.
Despite Friday's gains, the broader picture remains murky. The Dow is on pace for its worst weekly drop since March 2023, while the S&P 500 and Nasdaq are staring at their fourth straight week of losses. The small-cap Russell 2000 is teetering on the edge of a bear market, down nearly 18% from its highs. Now, all eyes are on next week's Federal Reserve meeting, with markets betting on rates staying unchanged. But with volatility picking up and economic data sending mixed signals, the coming weeks could be a crucial test for where the market heads next.
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