There’s important business news you should know about: Corporate insiders are unloading their shares very aggressively. This is important because, as a group, they often have valuable insight into the companies they run. Some market watchers consider insider activity one of the better indicators of investor sentiment. Now we know what they are doing; the question that needs to be answered is what’s prompting so many of them to sell.
News about their selling was recently reported by EPFR Global Market Intelligence, a financial data provider that monitors global market moves and investor sentiment. According to EPFR, corporate insiders sold $77.6 billion of their stock during the first half of 2026, a 20% increase from a year ago. The only time insider selling was more intense was back in 2021, when markets were flush with pandemic-era stimulus money.
“Insider activity suggests that executives are not especially eager to increase their exposure at current valuations,” EPFR analyst Winston Chua said. Actually, stock buying by corporate insiders has been tepid. They purchased just $6.9 billion worth of shares in the first half of this year, only slightly above the seven-year low of $6.7 billion recorded a year ago.
Insider selling is not a perfect indicator. Executives sell shares for many reasons, including taxes, diversification, personal expenses, and transactions arranged in advance under formal trading plans. Still, the sheer size of the recent selling is getting attention.
The Not-So-Magnificent 7
A closer look at the market shows that, despite the popular averages trading near their highs, all is not well on the Street. The so-called “Magnificent 7” stocks have been the darlings of the S&P 500 and, in large part, helped fuel the bull’s run. But they’ve been wobbly lately. In June alone, their market caps dropped by a whopping $2.3 trillion. July also was not the greatest month for them, and on some days, they shed hundreds of billions of dollars in market cap.
The following are examples of this carnage. During one five-day stretch in late July, shares of Tesla fell more than 19%; Alphabet, the parent company of Google, dropped 8.5%; Amazon fell 6.3%; Meta lost 6%; and Microsoft declined 1.3%.
Some of these losses were quickly reversed. Microsoft surged 15.5% after reporting better-than-expected results, and the group rebounded sharply during the first few trading days of August. Nevertheless, the volatility shows how nervous investors have become about companies that were considered nearly invincible just a short time ago.
Even SpaceX, which is not one of the Magnificent 7, did not escape the selloff. Investors were drooling over the company during its recent IPO, but by Aug. 4, its shares were approximately 15% below the offering price and 43% below the high they reached shortly after it went public.
Classic Warning
According to EPFR, the dollar amount of insider sales during the first half of 2026 was the second-highest first-half total in more than 20 years. Their selling was even greater than it was before the market meltdown in 2008.
By the way, it appears that the entire market is very nervous. On July 29, the Dow plunged by 1,153 points, making it the worst single-day drop since April 2025. The market rebounded in the following sessions, however, and by Aug. 4, the S&P 500 had returned to a record closing high.
Some market commentators view the insider selling as a classic warning. They argue that big-money investors are reducing their exposure while retail buyers continue coming into the market. They also warn that the recent declines could be the beginning of something much worse.
What’s Wrong?
Exactly what’s rattling so many of the savviest investors? A report on Bloomberg offers one answer: Wall Street is growing increasingly concerned about the hundreds of billions of dollars Big Tech is spending on AI infrastructure. By the end of June, the Magnificent 7 had lost roughly 13% from its May highs.
The tremendous amount of money Big Tech is spending is only part of the problem worrying insiders. There’s also increasing concern about when that investment will finally generate meaningful returns, and in some circles, the concern is not “when” but “if.”
“The real problem is not just the amount of money being spent, but that no one knows what the return on investment is,” said Ken Mahoney, CEO of Mahoney Asset Management.
Even More Hand-Wringing
Still another worry is when oil and gas will be able to pass safely through both the Strait of Hormuz and the Bab el-Mandeb Strait. Before the war, approximately 20% of the world’s oil consumption passed through Hormuz. The Bab el-Mandeb is also significant because it’s an important shortcut for global trade and oil shipments between Asia and Europe.
Unfortunately, despite ceasefire talks, Iran, the Houthis, and other forces have continued attacking ships and threatening those waterways. Oil flows through Hormuz remain sharply reduced. Saudi Aramco estimates that the global market has lost approximately 2.6 billion barrels of oil since the war began.
As a result, there’s a significant shortfall between the amount of oil reaching the market and the amount the world consumes daily. Countries and companies have been coping by drawing oil from strategic reserves and commercial inventories. Those inventories have been falling, although it would be inaccurate to say that reserves around the world are nearly empty. Aramco has warned that replacing the oil already lost from the market could take approximately 18 months, even after the Strait of Hormuz fully reopens.
There’s also a related problem that, for some reason, is being downplayed by much of the media: Energy infrastructure in the region remains vulnerable to attack. On July 27, the Houthis said they targeted Saudi oil facilities and the East-West oil pipeline. Saudi Arabia reported intercepting drones, and Aramco later said that the attacks had caused minimal operational and financial damage. Nevertheless, continued attacks on plants, pipelines, ports, and ships could quickly make the supply situation much worse.
Meanwhile, countries in Europe and elsewhere are feeling the squeeze on their energy supplies, and the following are just a few examples: Germany’s Lufthansa removed 20,000 short-haul flights from its schedule through October to conserve fuel and reduce costs amid soaring jet-fuel prices and supply concerns.
Air Canada temporarily suspended flights to JFK from Toronto and Montreal because high jet-fuel prices made the routes uneconomical. Thailand is not out of gasoline, but soaring diesel prices have pushed much of its fishing industry toward a standstill. More than half of the fishing trawlers at the country’s largest port were reportedly inactive, creating concerns about seafood supplies and prices.
In early April, approximately 18% of filling stations in France reported fuel-supply problems. The situation has fluctuated since then, so it would not be accurate to say that one in five stations was still closed at the end of July.
Britain also has very limited natural-gas storage capacity, equal to only approximately two or three days of demand. This leaves the country especially vulnerable during a major supply disruption, although it does not mean that England’s oil reserves are about to run out in a matter of days. Of course, energy impacts everything, not just gasoline.
There’s one other issue that insiders may be worried about: September and October are rapidly approaching, historically a difficult stretch for the market. September has generally been the weakest month for U.S. stocks and, over many measured periods, the only month with a negative average return.
October is remembered for some of the most dramatic market crashes, including those in 1929 and 1987, but it is not generally the worst month based on average returns. True, seasonal statistics do not guarantee what the market will do in any particular year, but they do add another concern to an already long list.
The bottom line is that there is a long list of issues investors have to be concerned about, and in this case, discretion may be the better part of valor.
Gerald Harris is a financial and feature writer. Gerald can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.