By Natalia Kniazhevich

(Bloomberg) -- Corporate America is sending a gloomy message when it comes to the sustainability of the record run in US stocks.

Wall Street is having a solid start to its earnings season, helping push the S&P 500 Index to an all-time high this week. Some of the most informed stakeholders, however, appear to be stepping aside.

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Almost 1000 executives at roughly 6,000 US-listed firms have unloaded shares this month, compared with 207 who added, resulting in the highest sell-to-buy ratio in five years, data compiled by the Washington Service show.

While it’s hard to know if any factors other than market performance dictated insiders’ decisions to buy or sell, a cautious stance among corporate leaders — who likely know their businesses best — is a troubling sign with worries already swirling around lofty valuations, soaring AI spending and a blizzard of ominous developments in global affairs.

“The move of corporate insiders has proven to be a powerful signal on forward returns of stocks,” said Joe Gilbert, a portfolio manager at Integrity Asset Management. “Between geopolitical risks and elevated equity valuations, we believe that executives are seeing these risks and using this as an opportunity to harvest gains, which we believe is something that investors should take note of.”

A slump Thursday drove home the underlying concerns around US stocks, the day after the S&P 500 reached a record and touched the 7,000 level for the first time. The S&P 500 sank 0.1% and the Nasdaq 100 Index lost 0.5% Thursday as results from Microsoft Corp. underscored growing unease over whether demand will justify massive spending on artificial intelligence.

There’s still enthusiasm for US stocks, particularly among the retail crowd, which has reliably bought into recent pullbacks. The backdrop of resilient economic growth is a big part of the draw, but so is the expectation of robust company earnings.

As it turns out, while overall corporate results have been decent, there are hints of waning momentum. Of the about 150 companies that have reported as of Thursday morning, 77% delivered positive earnings surprises, on track for the weakest showing in a year, according to data compiled by Bloomberg Intelligence. Add that to lingering geopolitical uncertainty and stock-market valuations that look rich following three years of double-digit gains.

Market positioning suggests caution has been creeping in among institutional investors too. Sentiment turned less cheery last week, with bearish and neutral responses climbing to four-week highs, according to Deutsche Bank AG data. Discretionary investor allocations continue to rotate out of mega-cap growth and technology stocks into more cyclical areas, Deutsche Bank strategist Parag Thatte wrote.

Hedge funds have also tilted defensively. Single-stock positioning recorded the largest net selling in four weeks, data from Goldman Sachs Group Inc.’s prime brokerage desk as of Jan. 23 show.

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