Bank of America Flags Potential U.S. Stock Pullback on ‘Buy the Rumor, Sell the Fact’ Risk

Bank of America is warning that U.S. stocks may face a correction after the Federal Reserve’s Jackson Hole Symposium on August 21–23.

Strategist Michael Hartnett said investors have crowded into equities, crypto, and corporate bonds on expectations of Fed rate cuts, but the market could face a “buy the rumor, sell the fact” pullback. BofA’s survey shows 91% of fund managers view U.S. stocks as overvalued—the highest since 2001—while allocations to foreign markets are rising.

Hartnett cautioned that low cash levels and bubble-like sentiment leave markets vulnerable, though gold, commodities, crypto, and emerging markets may benefit from a weaker dollar.

Clever Robot News Desk 19^th August 2025