Michael Burry maintains a bearish outlook on the U.S. stock market despite recent highs, warning of a potential steep decline reminiscent of the 1987 crash. In a recent Substack post, he highlighted concerns about rising market leverage and the risk of crowded positioning. While the S&P 500 and Nasdaq Composite saw gains, Burry has retained profitable bearish positions in several technology and semiconductor stocks, including Micron, Nvidia, and Tesla. He emphasizes the danger of increased exposure due to falling volatility, cautioning investors of underlying risks, though not indicating a crash is imminent.

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Michael Burry Sends Stark Warning on S&P 500 Crash

Nauman Khan

Wed, August 5, 2026 at 1:19 PM EDT1 min read

This article first appeared on GuruFocus.

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.