Stocks continue to hit record highs, and they could get a boost if a key group of investors are forced to become more optimistic. JPMorgan strategist Nikolaos Panigirtzoglou noted that macro hedge funds, a major market-moving group that trades entries and exits from large asset classes based on global economic factors, remain cautious even as the S&P 500 hits all-time highs. “Although overall reactions to positive and negative news are more normalized at the global level, our positioning indicators indicate that some investors appear to be adopting a more cautious positioning,” he said. These proxies include speculative investor positioning in U.S. stock futures as well as short interest in the SPY ETF, which tracks the S&P 500. “Similarly, when we look at specific positioning in U.S. stock futures, net long positions, these are now relatively close to their long-term median after being well above the median in 2024 and through 1T25. room to rise,” he added. The S&P 500 and Nasdaq Composite posted all-time highs on Wednesday, with the former ending the day at 6,753.72 and the latter closing above 23,000 for the first time. And while the artificial intelligence business has struggled a bit in recent weeks, it remains the dominant trend on Wall Street. Oracle shares are up 19% over the month last, while Nvidia grew 10.8% during that period. .SPX year-to-date SPX mountain year-to-date If the market continues to rise, these cautious hedge funds will be forced to capitulate and take long positions in “SPY” or related futures contracts to hedge their conservative positioning. JPMorgan notes that on names linked to Nasdaq, funds macro traders maintain relatively normal positions, but that these speculative traders are still underexposed to the broader S&P 500 index since the tariff-induced market correction in April. If these hedge funds don’t want to report underperformance to their investors at the end of the year, they may have to follow the market here, which will further fuel the stock rally. One of the traders The most remarkable macros in history appeared to hint at this effect earlier this week on CNBC. Paul Tudor Jones has spoken of a “breathtaking” summit that could start to take place. “I think all the ingredients are in place for some kind of blow,” Jones, the founder of Tudor Investment, said Monday on CNBC’s “Squawk Box.” “The story rhymes a lot, so I think a certain version of this will reproduce. If anything, today’s situation is far more potentially explosive than 1999.” (Check out the NYSE’s top 2026 strategies with Josh Brown and others on CNBC PRO Live. Tickets and insights here.)