Bank of America drops shock message on the stock market
The stock market appears to be in the midst of a reset, but Bank of America He thinks investors shouldn’t expect a big recovery just yet.
BofA’s chief investment strategist Michael HartnettSeeking Alpha’s report argues that the conditions that usually indicate the end of a brutal market correction are only partially present.
Hartnett said the current turmoil in the stock market follows a familiar pattern, and that’s where we’re seeing corrections: “Exogenous shocks at a time of extreme bullishness.”
In other words, markets have become incredibly optimistic only about external events such as: Iran war will shake investor sentiment and trigger a broad reset.
Here’s how the major stock indexes fared last week.
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S&P 500:6,878.88 to 6,740.02approximately 2.0%
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Dow Jones Industrial Average:48,977.92 to 47,501.55approximately 3%
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Nasdaq Composite: 22,668.21 to 22,387.68approximately 1.2%.
Source: Reuters
The S&P 500 was last traded at: 6,740.02 by on Friday, March 6, 2026 Associated Pressroughly down 1.5% year to date.
For perspective, when I last reviewed the S&P 500 on March 2, 2026, it closed at: 6,881.62; has since fallen 141.60 pointsor about 2.1%.
The primary focus on this part finish Morgan Stanley’s Mike Wilson The idea that the S&P 500 could appear stable even though many stocks below the surface had crashed was “dispersion.”
However, Hartnett’s market foundationsResetting is in progress.
Harnett believes several critical pieces of the reset are now visible in the current price action.
But the final piece of the puzzle has still not emerged.
Historically speaking, these resets tend to end after: safe haven assets Oil and the US dollar are weakening, but markets have yet to see that come to fruition, he says.
Hartnett argues that investors should not hold out until this happens:big transaction upside.”
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2020: 3,756.07 year-end closing; above 16.3% against for the year 3,230.78 finally 2019
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2021: 4,766.18 year-end closing; above 26.9% for the year
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2022: 3,839.50 year-end closing; 19.4% decrease for the year
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2023: 4,769.83 year-end closing; 24.2% increase for the year
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2024: 5,881.63 year end closing; 23.3% increase for the year
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2025: 6,845.50 year end closing; 16.4% increase for the year
Source: FRED/S&P Dow Jones Indices and S&P 500 closing levels via YCharts historical data
Hartnett’s thesis about the stock market boils down to this: market rotation developing during corrections.
