BofA: "Policy response possible if the S&P 500 falls further"

JH Kim

Summary

Bank of America strategist Michael Hartnett said the likelihood of a policy response by the White House and the Fed could increase if the S&P 500 index falls to around the 6,600 level.
Hartnett said a surge in oil prices, a protracted Iran war, and global geopolitical instability could catalyze an equity selloff.
He said gold, semiconductors, and European stocks are overbought, while software, bank lending, and Bitcoin (BTC) are oversold, and that any response could include tariff relief, Fed rate cuts, and monetary easing measures such as bond purchases.

Forecast Trend Report by Period

An analysis suggests that if U.S. equities extend their decline, it could trigger a policy response from the White House or the Federal Reserve (Fed).

According to Walter Bloomberg on the 13th (local time), Bank of America (BofA) strategist Michael Hartnett said that if the S&P 500 index falls to around the 6,600 level, the likelihood of a policy response could rise. That is about 1% below recent levels.

Hartnett cited a surge in oil prices, the protracted Iran war, and global geopolitical instability as factors that could catalyze an equity selloff.

He also assessed that some assets—such as gold, semiconductors, and European stocks—have moved into overbought territory, while software, bank lending, and Bitcoin (BTC) are in oversold territory.

He projected that if a policy response materializes, it could include tariff relief, de-escalation of tensions in the Middle East, and monetary easing measures such as Fed rate cuts or bond purchases.