Bank of America warns: S&P 500 approaches sell signal, 6300 points as key threshold.

Bank of America strategist Michael Hartnett pointed out that the S&P 500 index has approached a sell signal after rising to historic highs. He suggested that investors start reducing their holdings when the benchmark index breaks through 6300 points - a level that is only 0.3% higher than Thursday's closing price. Hartnett also reiterated that with the House passing a $3.4 trillion tax cut fiscal plan, the risk of a summer market bubble is accumulating. "An overbought market may continue to be overbought, as greed is harder to overcome than fear," Hartnett wrote in the report. The Bank of America research team describes the current market situation as a "fight between bubble and collapse," pointing out that the summer risk leans towards the S&P 500 index reaching 7000 points, rather than falling to 5000 points. According to Bank of America citing EPFR Global data, as of the week ending July 2nd, money market funds attracted $56.4 billion in inflows, bonds received $20.5 billion in funding, and stocks, gold, and cryptocurrency funds recorded net inflows of $2.2 billion, $1.4 billion, and $1.0 billion respectively. Driven by signals of U.S. economic resilience and Donald Trump's softened stance on tariffs, U.S. stocks have surged to historic highs, reigniting market speculation, with tech giants once again in favor and the artificial intelligence frenzy making a comeback. However, trade concerns still remain central, as Trump stated that his administration will begin sending letters to trading partners this Friday to set unilateral tariff rates. As a result, U.S. stock index futures fell in early trading on Friday, while the spot market was closed for the Independence Day holiday. It is worth noting that as the S&P 500 index ended June at record levels and had its best quarter since 2023, many investors are gradually reducing their risk exposure. Bank of America's clients are withdrawing from U.S. stocks at the fastest pace in 10 weeks. The bank's quantitative strategist Jill Carey Hall and others pointed out in a report released on Tuesday that institutional investors, retail traders, and hedge funds, among all major client groups, collectively withdrew $1.3 billion from U.S. stocks last week. This sell-off occurred as the S&P 500 index rose 3.4% in the five trading days, marking its first historic high since February.