Only Consumer Staples rewarded shorts — while IT and Materials led the 2025 pain trade.

To identify which U.S. equity sectors have been most supportive of short selling strategies, we segmented sectors into quintiles using S3’s real-time short interest data (% of float). Only Consumer Staples saw its most shorted stocks post negative YTD returns, underscoring its defensive position amid broad market momentum.

Most other sectors have punished crowded shorts, with Technology and Materials standing out as the most painful, both driven by AI infrastructure and critical-mineral themes as “old economy” inputs powered the “new economy” buildout.

Consumer Staples – The Outlier

Only sector where most shorted stocks have negative average return YTD &underperformance relative to the sector average.

3 Battleground Stocks in sector: B&G Foods, Tootsie Roll & Westrock Coffee Co.

$7.2B in top quintile short positions, up from $5.8B at start of year.

Information Technology – The AI Buildout Squeeze

From -30% in April to +60% YTD, tradable volatility, but ultimately short side losses.

20 Battleground Stocks in sector, 2nd to Healthcare with 21.

Largest contributors: RGTI & APLD, both linked to AI and data infrastructure.

Materials – The Pain Trade

Top performer: +90% return for most shorted names, 5 Battleground stocks in sector. The mining industry drove substantial portion of most shorted returns.

Key contributors: UAMY, TMC, and MP— all mining, and METC in coal.

Use S3’s real-time short interest analytics and Crowding + Squeeze Risk framework to stay ahead of the 2025 pain trade. Identify shorts that still hedge risk—or fuel it.

Want to know more? Access this data in real time using S3’s BLACK APP & BLACK MAP

The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC (“S3 Partners”) to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks, and merits, as well as the legal, tax, accounting, and investment consequences, of such decisions.