Bank of America said the brief return of risk appetite in U.S. equities after Nvidia’s earnings was quickly overshadowed by renewed rate pressure following remarks at Jackson Hole. The S&P 500 ended Friday slightly lower and the Nasdaq fell about 0.5%, though both indexes still posted weekly gains, showing that earnings from AI leaders continue to support the broader market. At the same time, the bank said richly valued assets are becoming more sensitive to policy signals.
Michael Hartnett’s team at Bank of America warned that the U.S. stock bull market has so far continued to ignore geopolitical conflict and the summer pullback in technology shares, but autumn could bring a “reality check.” The bank said investors remain in a “summer consensus,” continuing to buy stocks and other risk assets. If bond volatility, policy uncertainty, and political risk flare up at the same time, optimistic positioning could come under pressure. On the trading side, Bank of America said the market may shift away from the idea that “Nvidia drives everything” and return to focusing on rates, fiscal policy, and valuations. It added that AI earnings remain the core support for U.S. equities, but another rise in long-end yields would keep compressing growth-stock valuations. The bank therefore continues to recommend gold and commodities as hedges against policy and fiscal risk while waiting for an autumn repricing.
Bank of America said U.S. stocks briefly regained risk appetite after Nvidia’s earnings, but remarks at Jackson Hole quickly pushed rate pressure back to the center of the market.
On Friday, the S&P 500 closed slightly lower and the Nasdaq fell about 0.5%. Even so, both indexes still posted gains for the week, suggesting that earnings from AI leaders are still supporting the broader market, even as richly valued assets become more sensitive to policy signals.
Michael Hartnett’s team at Bank of America warned that the U.S. equity bull market has continued to “ignore” geopolitical conflict and the summer pullback in tech shares, but autumn may bring a “reality check.” The bank said the market remains in a “summer consensus,” with investors still buying stocks and other risk assets. If bond volatility, policy uncertainty, and political risk intensify together, bullish positioning could face pressure.
From a trading perspective, that would mark a shift away from the idea that “Nvidia drives everything” toward renewed scrutiny of rates, fiscal policy, and valuations. Bank of America said AI earnings remain the key variable supporting U.S. equities, but if long-end yields rise again, valuations for growth stocks will keep getting compressed.
Based on that view, the bank continues to recommend gold and commodities as hedges against policy and fiscal risk while waiting for the market to reprice in the autumn.
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