Bank of America: US stocks may face a "reality check" this fall, with bullish positions under pressure.

U.S. equities briefly regained risk appetite following Nvidia’s earnings report, but remarks from the Jackson Hole symposium quickly pushed interest rate pressures back to the forefront of market concerns. On Friday, the S&P 500 edged slightly lower, while the Nasdaq fell around 0.5%. Both indexes still notched weekly gains, reflecting that AI leader earnings continue to underpin the broader market, though high-valuation assets are growing more sensitive to policy signals. Bank of America’s Michael Hartnett team warns that the U.S. stock bull market, while continuing to “ignore” geopolitical conflicts and summer tech stock pullbacks, may face a reality check in the fall. The bank notes the market remains in a “summer consensus” where investors keep buying risk assets like stocks; once bond volatility, policy uncertainty and political risks converge, bullish positions will come under pressure. For trading, this means the market will shift from “Nvidia drives everything” to re-examining interest rates, fiscal policies and valuations. AI earnings remain the core variable underpinning U.S. stocks, but if long-term yields rise again, growth stock valuations will continue to compress. Bank of America therefore still recommends hedging policy and fiscal risks with gold and commodities, waiting for the market to reprice in the fall.