Investors likely to be forced to chase US stock market rally — Bank of America

Bank of America strategists believe investors may be forced to chase the US stock market rally sparked by the US-China tariff pause. 

A poll by the bank conducted ahead of the two countries’ trade talks showed that fund managers were 38% underweight on stocks of US companies, the most in two years. Meanwhile, about 40% of respondents stated their intention to increase hedges against the dollar decline.

Optimism about the US economic outlook has improved significantly following the agreement between Washington and Beijing to temporarily lower reciprocal tariffs.

However, a sustained rally in the US stock market threatens bearish position holders with major losses. At the same time, traders may face even more difficulties while trying to keep up with the stock market's rise from the current levels, Bloomberg reports.

The S&P 500 Index, having fallen 19% from February’s high, is close to recouping all of its 2025 losses, according to the news agency.