Bank of America Flashes Sell Signal at 9.2 as AI Stocks Hit 39% Weight in S&P 500

In its latest Flow Show report, Bank of America's Bull-Bear indicator flashed a sell signal at 9.2, marking its deepest sell zone since May 2026. The indicator has historically achieved a 60% accuracy rate, with global stock markets typically retreating 2–3% within 2–3 months of such signals, with maximum declines reaching 15–20%. Meanwhile, AI-related stocks now comprise 39% of the S&P 500 index, reaching historically extreme concentration levels comparable to late-19th-century railroad stock speculation.

U.S. Treasury yield curve has shown bear flattening since the Federal Reserve's newly nominated chairman Kevin Warsh was announced on January 30, with the 2–10 year spread narrowing from 75 basis points to 25 basis points. However, contradicting the warning, the U.S. stock market attracted a record weekly inflow of $119.2 billion, with annualized figures potentially reaching the all-time high of $739 billion.