Stock Market Caution as S&P 500 Nears Critical Level
Global stocks may keep climbing, but a warning sign looms. Bank of America’s Michael Hartnett cautions that if the S&P 500 exceeds 6,300,it could signal a sell-off. This comes as stocks hit record highs, despite new tariff worries.
Stock Market at a Crossroads: S&P 500 Faces Key Level
Global stocks might keep rising, but a warning is on the horizon. Bank of America’s Michael Hartnett warns that if the S&P 500 climbs above 6,300, it could trigger a sell-off. Despite stocks hitting record highs,investors are moving money into cash and bonds.
Both the Dow Jones and nasdaq have risen as markets react positively to easing Middle East tensions and strong economic data. The S&P 500 closed at 6,279.35 on Thursday, driven by better-than-expected payrolls data. However, analysts caution that further gains could lead to a sell signal.
Trade war risks are back in focus due to President Trump’s tariff comments. As the 90-day tariff pause ends,some investors are becoming more cautious.
Hartnett suggests that if the S&P 500 surpasses 6,300, a period of selling could follow. BoFA strategists also note growing bubble risks, especially after Congress approved Trump’s ‘One Big Beautiful Bill,’ a $3.4 trillion package.
The market is approaching a “bubble or bust” scenario. Researchers believe the S&P 500 has a higher chance of reaching 7,000 this summer than falling to 5,000. “Overbought markets can stay overbought as greed is harder to conquer than fear,” Hartnett wrote.
Investors poured $56 billion into money market funds last week, with bonds attracting over $20 billion. Equities saw net inflows of $2.2 billion, while gold and cryptocurrency funds drew $1.4 billion and over $1 billion, respectively. Bitcoin briefly spiked above $110,000 before falling back.
