Elliott’s hedge fund gains under 2% in nine months and warns of bear market
Elliott Investment Management posted flat third-quarter returns and under 2% year to date, while warning that a severe market decline could be triggered by AI.
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what happened
Hedge fund Elliott Investment Management posted flat returns in the third quarter of 2026 and gained less than 2% over the first nine months of the year. The Wall Street Journal reported this on Monday, citing an investor letter it reviewed. Founded in 1977 by US billionaire Paul Singer, Elliott is known as an activist investor. It has taken large stakes in companies including PepsiCo and Synopsys and pushed them to improve performance. The firm manages about $80 billion.
In the letter, the firm said that “at present, virtually every alarm bell warning of a substantial bear market ahead is ringing.” Elliott described zero-day options and meme stocks as market distortions that look more like gambling than investing. It also said a pullback in expectations for AI investment could help trigger a severe market decline. Reuters said the company did not immediately respond to its request for comment outside regular business hours.
why it matters
The letter matters less for the fund’s modest returns than for its warning about market excess. When an influential investor publicly flags a possible bear market and links that risk to expectations for AI, it can shape sentiment toward the largest US technology names and the broader equity market.
market impact
US stocks: a bear-market warning and AI-related risks weigh on sentiment
- US stocks pressure down — warning of a possible bear market and a pullback in AI expectations
tags
instruments
sources
- Hedge fund Elliott gains less than 2% through September, WSJ reports — Reuters, 3 November 2026 at 00:58 UTC
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