Hedge funds and other short sellers are betting against many stocks even as the market sets new records. Many short sellers have pulled back since the beginning of the meme stock craze, but the practice of betting against stocks still exists. Some of the biggest stocks on the short list have struggled this year. But with interest rates falling and stocks rising this week, the target stocks could be candidates for a so-called short squeeze. A squeeze occurs when stock gains spur short sellers to cover positions by quickly buying shares to limit losses. In certain cases, this can create a feedback loop where the extra buying pressure forces other short sellers to do the same. These are the five stocks with a market cap of at least $2 billion that had the lowest short interest as a percentage of float, or highly liquid stocks, at the end of May, according to FactSet. The list shows that hedge funds are finding ways to bet against commercial real estate. Arbor Realty Trust and Medical Properties Trust are real estate investment trusts, which serve as public vehicles for the sector. Another area targeted by hedge funds appears to be specialized financial companies. Upstart is a personal loan company, and Trupanion is a pet insurance company. Both commercial real estate and small financial firms can benefit from the strength of the US economy and interest rate cuts from the Federal Reserve. ImmunityBio is the type of speculative name short sellers often target, as biotech stocks can see big swings in either direction based on clinical trial results. The company has multiple trials, but only reported $40,000 for the first quarter. In the past year, the stock has traded below $2 and above $9 per share. IBRX 1Y mountain ImmunityBio historical value in US Dollars in 2020. Two names outside the top five that outperformed the broader market this year are Comstock Resources and Madrigal Pharmaceuticals. Such performance may put them under short-term pressure in the near term, although the exact financial position of these short sellers is unknown. Notably, GameStop is not on the expanded list as a stock with a short interest of at least 25%. Meme stocks benefited from a short run during the 2021 rally but now have fewer bets. Short sellers Citron Research said there have been exits from positions against the stock. – CNBC’s Nick Wells contributed reporting.