The steady drumbeat of gains that has lifted the S&P 500 Index in six of the last seven weeks is making life difficult for bears.

Hedge funds that aim to profit from long and short bets have raised net equity holdings in the past three months, with bullish positions now exceeding bearish ones by 22.7 percentage points. That’s higher than 97 percent of the time since Credit Suisse Group AG began tracking the data in 2009. Perhaps not coincidentally, marketwide readings of short interest just posted the biggest decline in four years, while shares of the most-hated companies led in the rally that just lifted the S&P 500 to another record Monday, its 10th since early July.

Stocks slipped from an all-time high Tuesday, with the S&P 500 falling 0.6 percent to 2,178.15 at 4 p.m. in New York, the biggest decline in two weeks. The Dow Jones Industrial Average lost 84.03 points to 18,552.02. Hawkish comments from a Federal Reserve official took some momentum out of the six-week rally on concerns that growth may not be sturdy enough yet to bear higher interest rates.

Funds are rushing to shore up performance in an industry where returns have trailed the S&P 500 every year since the bull market began. Their buying helps explain the resilience in stocks at a time when Wall Street strategists are predicting losses and individuals are pulling money out of equity funds. According to a study by Barclays Plc, purchases involving short covering and buying related to equity futures have amounted to $120 billion since March, underpinning a five-month advance that drove the equity benchmark up almost 20 percent from its 2016 low.

“They don’t believe it, but they have to cover shorts and add some longs,” Mark Connors, Credit Suisse’s global head of risk advisory in New York, said by phone. “They have to participate in the upside.”

Hedge funds have raised their net long positions in stocks from this year’s bottom of 20 percent at the end of April. Partly a result of their growing appetite, the number of S&P 500 futures contracts held by large speculators have reversed from net short in a span of months, reaching the most bullish level in three years, data compiled by Commodity Futures Trading Commission show.

At the same time, the proportion of shares borrowed to sell on U.S. exchanges has fallen from a seven-year high of 4.4 percent to 3.9 percent as the market’s march higher forced bears to capitulate. A Goldman Sachs Group Inc. basket of most-shorted stocks has jumped 15 percent this quarter, the most since 2010.

Long-short funds are gearing up buying even as strategists at 20 brokerages forecast an average decline of 2 percent in the S&P 500 for the rest of the year. The optimism is also in stark contrast with individuals, who have taken advantage of every rally to offload as valuations sit at a decade high and corporate profits are mired in the longest decline since the global financial crisis.

To Keith Parker, head of cross-asset strategy research at Barclays in New York, the dash to buy stocks suggests the last bull will soon be exhausted.

“The wall of worry, as measured by short interest and HF net exposure, has come down,” Parker wrote in a note Monday. That’s “leaving equities vulnerable,” he said.

Connors at Credit Suisse still sees room for hedge funds to raise equity holdings. Their gross exposure, the total value of both long and short positions, is down 15 percent from the end of last year, a sign that money managers haven’t fully embraced the rally, he said.

“We are in the third inning of a performance chase by funds if markets continue to melt higher,” Connors said. “The net, or tilt, is higher but the overall footprint is still low. It’s low conviction.”

That was evidenced Tuesday, as about 5.9 billion shares traded hands on U.S. exchanges, 14 percent below the three-month average. New York Fed President William Dudley said today the central bank could potentially raise interest rates as soon as next month, warning investors that they are underestimating the likelihood of increases in borrowing costs.

“Dudley wants to keep expectations grounded,” said Yousef Abbasi, a global market strategist at JonesTrading Institutional Services LLC. “You have seen some stronger employment data, but other pieces of data are showing a struggle still -- retail sales, inflation reads have been among recent disappointments. It’s just reality, rates might move higher by December if jobs data continues to come in better.”

Phone and utilities shares led declines, falling at least 1.2 percent as the yield on 10-year Treasuries climbed past 1.57 percent. Praxair Inc. rose the most since March on merger talks with Germany’s Linde AG, and Morgan Stanley climbed to a seven-month high after activist Jeff Ubben’s ValueAct Capital Management disclosed a 2 percent stake. Cintas Corp. surged 5.2 percent to a record after agreeing to buy G&K Services Inc. in a $2.2 billion tie-up of providers of workplace uniforms and corporate apparel.