Citadel Securities Predicted the Stock-Market Reset. Now It Warns of a New Risk: Rising Leverage.

Citadel Securities, the trading giant that called the recent stock-market reset, now says a new force is building: leverage. Strategist Scott Rubner points to a growing list of buyers who are pushing the market in a positive direction. The key players, he says, are large hedge funds and institutional money managers. These buyers are not just returning to the market. According to Rubner, they are doing so with borrowed money, a practice known as leverage. This means they are amplifying their bets, which can boost gains—but also increases the risk of a sharper sell-off if the market turns. The firm’s earlier warning about a market reset proved accurate. Now, its latest observation suggests that the recovery may be driven by risk-taking rather than solid, cash-based demand. For everyday investors, the takeaway is simple: the market is moving up again, but the fuel behind that move may be less stable than it appears.