Michael Burry Warns US Equities Near Major Market Top

Investor Michael Burry warned on Tuesday that the current rally in US equities may be nearing a major peak, potentially leading to a sharp sell-off similar to the 1987 Black Monday crash. Writing in a Substack post, Burry argued that falling market volatility is driving systematic and volatility-targeting funds to increase leverage and equity exposure, creating a self-reinforcing cycle that leaves the market vulnerable to a reversal.

This warning follows the S&P 500 and Nasdaq Composite reaching new record highs. As a critic of the AI-led rally, Burry maintains short positions in several companies and ETFs, including Tesla, Palantir, Caterpillar, Applied Materials, Micron, and the iShares Semiconductor ETF. He noted that all these positions remain profitable, with the exception of his bet against Nvidia.