Bank of America warns that in the second quarter, U.S. stocks, bonds, and gold will be under pressure, while the U.S. dollar and oil prices may emerge as winners.

Bank of America Securities' new outlook shows that stocks, bonds, and gold will face challenges in the second quarter, with the dollar and oil markets expected to strengthen. The bank's technical analyst, Paul Ciana, pointed out in a report on March 27 that recent market trends have confirmed previous forecasts, including rising US bond yields, a stronger dollar, and rising oil prices. These trends are expected to continue unless there is a significant macroeconomic turnaround triggering a sharp reversal. US bond yields are a focus of the market's attention. Long-term interest rates have broken out to the upside and may continue to climb, with the 30-year bond yield potentially reaching around 5.4% in the coming months. This trend reflects the market's concerns about persistent inflation, which is closely related to geopolitical tensions and high commodity prices. At the same time, the stock market is also under pressure. The S&P 500 index has formed a top formation and entered a downtrend after breaking through key technical levels in early March. If the current trend continues, the index may further decline to the 6000-point range. Bank of America stated: "After setting a slight new high in the first quarter but falling short of the target, a wedge top and round top formation have emerged. The closing price fell below the 20-week moving average on March 6, signaling the beginning of a downtrend. Downside risks in the second quarter include points at 6340/6175/6000. The 20-week moving average near 6810 is a key resistance level that could guide the downtrend. We have not yet seen panic selling signals." In contrast, the US dollar index has shown signs of strength after building a base over the past year. Technical signals suggest that it may rise to highs from previous cycles, putting pressure on global markets and exporters. "Since June 2025, we have been inclined to long the US dollar, especially against commodity import countries," Bank of America said. "The US dollar index hit bottom and rebounded to a 52-week highsuch as the 200-week moving average near 103indicating overall dollar strength and increased pressure on exporters." Oil prices continue to fluctuate but are supported. After a sharp rise earlier this year, it is expected that oil prices will fluctuate within the range of $90 to $100 per barrel, with the possibility of further upside if supply concerns persist. Meanwhile, gold seems to be entering a correction phase after a strong rally. In the short term, prices may move lower or trade sideways, with downside targets well below recent highs. Bank of America said, "It is expected that there will be a prolonged adjustment in the second and third quarters, the rebound in the second quarter will fade, and gold prices may test $4000/ounce or even $3700, with the current direction being sideways to downward." Ciana also emphasized the so-called "policy put option" levels, which are levels at which the government may take action in response to market pressure, especially as the US election approaches. These thresholds may affect the extent of market volatility before policymakers intervene. Overall, the market outlook suggests rising interest rates, a stronger dollar, and differentiated risk preferences, with limited support for traditional safe-haven assets in the short term.