Quick overview

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Bank of America warns that the S&P 500 is nearing a sell signal after recently reaching all-time highs, according to strategist Michael Hartnett. He noted that if the index crosses 6,300 points—just 0.3 percent above Thursday’s close investors should consider selling their shares.

Hartnett emphasized that the risks of a market bubble are increasing, particularly as the House of Representatives has passed a $3.04 trillion tax-cutting fiscal package. He stated in a note, “Growth is more difficult to overcome than fear, so overbought markets can remain overbought.”

The strong performance of the US economy has pushed US stocks to new highs, especially following President Donald Trump’s easing of tariff policies. This has led to a more speculative market environment, with artificial intelligence and other technology giants gaining renewed popularity.

However, Trump’s announcement that his administration will begin sending letters to trading partners keeps trade issues at the forefront of discussions.

In addition, the US dollar has experienced a historic decline in value, falling over 10% so far in 2025, coinciding with sporadic increases in long-term US Treasury yields. This unusual trend indicates that as investors reassess President Trump’s unpredictable policy changes, they are reevaluating US holdings, which were viewed as safe havens.

Many currency experts anticipate further weakening of the dollar in the coming years, despite its continued status as the world’s reserve currency. Erik Nelson, a macro strategist at Wells Fargo, commented, “It’s US exceptionalism falling by the wayside, and the rest of the world is playing catch-up.”

In April, the “Sell America” movements in the stock, foreign exchange, and US Treasury markets caused significant turbulence worldwide, and analysts expect similar trends to persist. Nelson noted, “I believe that political stability is waning around the world, which is generally problematic for volatility in financial and economic markets.”