Bank of America says stock market rally is over

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Bank of America doesn’t think this year’s stock rally is going any higher. Michael Hartnett, one of the firm’s top strategists, said the rebound already happened, and now it’s just flatlining. Hartnett wrote in a note on May 8 that the rally was “correct,” based on optimism around tariff cuts earlier in the second quarter, but that the game is basically over. He said traders followed the usual playbook: “buy the expectation, sell the fact.” And now they’re selling. The strategist pointed to the S&P 500, which shot up 14% after President Donald Trump announced a pause in some tariffs on April 9. But even after that boost, the index is still down 3.7% for the year. That puts it behind foreign markets, which Hartnett says are looking better. He now favors bonds over stocks and prefers international equities instead of US ones, saying American assets are stuck in a “late-stage structural bear market.” Source: Bloomberg Investors pull out cash as Trump signs UK deal Bank of America backed up Hartnett’s call with real money flow numbers. In the last four weeks, investors have yanked $24.8 billion from US stocks, the biggest exit in two years. The data came from EPFR Global, and it shows that people aren’t sticking around to see what happens next. They’re out. And that exodus fits right into Hartnett’s warning that this isn’t the time to be chasing stocks anymore. At the same time, the White House has started cooling down on the trade war language. Officials are considering serious tariff cuts during weekend talks with China. On Thursday, Trump also dropped a trade framework with the United Kingdom, calling it a “breakthrough.” It’s the first deal the US has made with any country since Trump started pushing the idea of “reciprocal” tariffs. But even…