Clients bet on US stock rally this summer — BofA

According to Bank of America strategists, investors are expecting US stocks to rise due to strong corporate earnings in Q2. They believe the market could maintain its positive momentum through late summer, particularly ahead of the Federal Reserve's annual symposium at the end of August. However, a pullback may follow as some traders exit the market.

Senior bank strategist Michael Hartnett noted that clients show little concern about economic conditions or elevated stock prices. Most remain confident that companies will report solid earnings and boost AI investments. This sentiment continues to propel the S&P 500, which has already hit record highs.

The bank's analysts expect S&P 500 companies' Q2 profits to grow 2.8% year-on-year—significantly below Q1's 14% surge. Yet market participants still believe in economic stability and President Trump's actions, anticipating he will not let tariff disputes escalate into serious consequences.