Bank of America’s Sell Side Indicator hits 56.2%, its highest since February 2025, signaling potential market pullback risks.
Bank of America’s Sell Side Indicator reached 56.2% in May, its highest level since February 2025, a threshold historically linked to sharp S&P 500 declines. The bank’s strategists set a 7,100 target for the index, implying a near-7% drop from current levels, and advised investors to “sell in June.”
The indicator, tracking Wall Street’s recommended equity allocations, last hit similar levels before a 1,000-point S&P 500 decline. While BofA remains bullish on tech, it warns of an “air pocket” forming amid elevated growth expectations and stretched valuations, particularly in mega-cap stocks.
Analysts favor capital expenditure beneficiaries like semiconductors and hardware over hyperscalers, whose combined AI spending plans total $725 billion this year, shifting them toward leveraged business models.