Michael Burry (Trades, Portfolio) is keeping his bearish market view intact as U.S. stocks reach fresh highs, warning that the current rally could eventually give way to a steep decline similar to the 1987 crash, according to a Tuesday Substack post.
The S&P 500 gained about 1.9% Tuesday and reached a new closing high, while the Nasdaq Composite advanced 2.7%.
The gains came as corporate results remained firm and oil prices declined amid hopes for improved shipping conditions through the Strait of Hormuz.
Burry, known for his housing-market trade before the 2008 financial crisis, said he continues to hold bearish positions tied to the iShares Semiconductor ETF, Micron Technology (MU), Nvidia NASDAQ:NVDA, Caterpillar NYSE:CAT, Palantir Technologies NASDAQ:PLTR, Tesla NASDAQ:TSLA and Applied Materials NASDAQ:AMAT. He said most of those positions remain profitable, while the Nvidia trade is the exception.
Burry's warning centers on rising market leverage. He argues that falling volatility can encourage momentum and volatility-targeting strategies to increase exposure, potentially adding pressure if market conditions reverse.
For investors, Burry's comments add a cautionary signal to an otherwise strong market backdrop. His warning does not establish that a crash is imminent, but it highlights risks tied to crowded positioning and leverage.