S&P 500 Hits Record Highs — But BofA Warns Bullish Sentiment Has Gone Too Far

Bank of America's proprietary Bull & Bear Indicator has reached its most extreme bullish reading since 2021, prompting the bank to warn investors that market optimism is at dangerous levels. Strategists recommend rotating away from high-beta sectors like tech and banks towards defensive assets, cash, and short-duration holdings. This warning comes as the S&P 500 hits record highs and massive liquidity pours into financial markets, with significant inflows into equity and fixed income funds.