![](\"https:\/\/www.thestreet.com\/.image\/c_fit%2Ch_800%2Cw_1200\/NDA6MDAwMDAwMDAyOTA1MTk4\/chicago-illinois-march-04-traders-work-in-the-sp-options-pit-at-open-of-trading-at-the-cboe-global-markets-exchange-on-march-04-2026-in-chicago-illinois-investors-continue-to-weigh-the-impact-the-us-i.jpg\")
<\/p>\n<\/p>\n
The stock market appears to be in the middle of a reset, but Bank of America feels investors shouldn\u2019t expect a major rebound just yet.\u00a0<\/p>\n
BofA\u2019s chief investment strategist, Michael Hartnett, argues that the conditions that usually signal the end of a brutal market correction are only partially in place, per reporting from Seeking Alpha.<\/p>\n
Hartnett said the current turbulence in the stock market follows a familiar pattern, where we\u2019re seeing corrections led by \u201cexogenous shocks at a time of excess bullishness.\u201d<\/p>\n
In other words, markets became incredibly optimistic, only for external events such as the Iran war to rattle investor sentiment, triggering a broad reset.<\/p>\n
Here\u2019s how the major stock indices have fared over the past week.<\/p>\n
S&P 500:6,878.88 to 6,740.02, down about 2.0%Dow Jones Industrial Average:48,977.92 to\u00a0 47,501.55, down about 3%Nasdaq Composite: 22,668.21 to 22,387.68, down about 1.2%.
\nSource: Reuters<\/p>\n
The S&P 500 was last trading at 6,740.02 on Friday, March 6, 2026, according to the Associated Press, down roughly 1.5% year to date.\u00a0<\/p>\n
For perspective, when I last covered the S&P 500 on March 2, 2026, it closed at 6,881.62; since then, it has fallen 141.60 points, or about 2.1%.<\/p>\n
The primary focus on that piece covering Morgan Stanley’s Mike Wilson was \u201cdispersion,\u201d the idea that the S&P 500 can appear stable even as many of the stocks beneath the surface have crashed.<\/p>\n
That said, it overlaps with Hartnett\u2019s point that the market\u2019s fundamentalsare undergoing a reset.\u00a0<\/p>\n
Harnett believes a few critical pieces of the reset are now being seen in the current price action.\u00a0<\/p>\n
However, the final piece of the puzzle still hasn\u2019t appeared.\u00a0\u00a0<\/p>\n
From a historical standpoint, these resets tend to end after safe-haven assets such as oil and the U.S. dollar weaken, but he says the markets have yet to see it come to fruition.<\/p>\n
Until that happens, Hartnett argues that investors shouldn\u2019t expect \u201cbig trading upside.\u201d<\/p>\n
S&P 500 year-end closes (2020-2025)2020: 3,756.07 year-end close; up 16.3% for the year versus 3,230.78 at the end of 20192021: 4,766.18 year-end close; up 26.9% for the year2022: 3,839.50 year-end close; down 19.4% for the year2023: 4,769.83 year-end close; up 24.2% for the year2024: 5,881.63 year-end close; up 23.3% for the year2025: 6,845.50 year-end close; up 16.4% for the year
\nSource: S&P 500 closing levels via FRED\/S&P Dow Jones Indices and YCharts historical data
\nA rotation beneath the surface of the stock market<\/p>\n
Hartnett\u2019s thesis on the stock market hinges on a market rotation that develops during corrections.\u00a0<\/p>\n
That\u2019s usually when money flows away from crowded winners and toward assets that have absorbed the bulk of the damage.\u00a0<\/p>\n
He argues that the heavily sold areas of the stock market are already bottoming out.\u00a0It points to a part of the tech space and risk-heavy assets that experienced major drawdowns in recent months.<\/p>\n
Related: Morgan Stanley delivers curt 2-word verdict on S&P 500<\/p>\n
\u201cThe first condition is when the \u2018oversold\u2019 assets trough,\u201d Hartnett wrote, laying out the case that the process might have already been underway across software stocks, large-cap tech giants, and the \u201cMagnificent 7,\u201d along with areas like private credit, bank loans, and even bitcoin.<\/p>\n
So the areas of the market that were out of favor have already taken the majority of their licks.\u00a0<\/p>\n
At the same time, we\u2019re seeing a completely opposite dynamic start to play out elsewhere.\u00a0\u00a0<\/p>\n
Assets that investors were flocking toward in droves during the recent rally are seeing investors step back.\u00a0\u00a0<\/p>\n
Hartnett underscored the recent selling pressure across gold and chip stocks, along with emerging-market, European, and banking stocks, reflecting a broader rebalancing across portfolios after the recent bout of choppiness.<\/p>\n
\u201cThe second condition is met when the \u2018overbought\u2019 assets sell,\u201d Hartnett explained.<\/p>\n
Put simply, he argues that capital continues rotating across asset classes with investors unwinding positions that became stretched during the previous rally.<\/p>\n
Overbought trades begin to unwind across key asset classesSPDR Gold Shares ETF (GLD): down nearly 2.1%
The SPDR Gold Shares ETF, tracking the price of the shiny yellow metal, dropped from around $483.75 on Feb. 27 to $473.51 on Mar. 6, a decline of nearly 2.12%.\u00a0VanEck Semiconductor ETF (SMH): down about 6.4%
The VanEck Semiconductor ETF, which gauges the chip space, dropped from $406.37 on Feb. 27 to $380.56 on Mar. 6, a decline of nearly 6.35%.\u00a0iShares MSCI Emerging Markets ETF (EEM): down about 8.4%
The iShares MSCI Emerging Markets ETF, which tracks stocks across major emerging economies, slid from $62.58 on Feb. 27 to $57.32 on Mar. 6, a drop of about 8.41%.Vanguard FTSE Europe ETF (VGK): down about 6.3%
The Vanguard FTSE Europe ETF moved from $90.17 on Feb. 27 to $84.46 on Mar. 6, a drop of roughly 6.33%.SPDR S&P Bank ETF (KBE): down about 2.5%
The SPDR S&P Bank ETF, tracking a basket of major U.S. banking stocks, declined from $61.05 on Feb. 27 to $59.55 on Mar. 6, a weekly drop of approximately 2.46%.
\nSource: Yahoo Finance<\/p>\n
Related: Morgan Stanley drops blunt reality check on gold price surge<\/p>\n
#Bank #America #drops #shock #message #stock #market<\/p>\n","protected":false},"excerpt":{"rendered":"
The stock market appears to be in the middle of a reset, but Bank of…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[259],"tags":[425,200,854,33,574,1182,91],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/902"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=902"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/902\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=902"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=902"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=902"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}