Bank of America’s signal is clear enough: AI hot money is starting to flow into the real economy. Remember the defensive setup for 2026.

Bank of America states that the market is in the late stage of an extremely bullish bubble, with bull-bear indicators retreating but sell signals still valid. Capital is flowing from AI-related assets to sectors driven by the real economy, such as silver, industrial metals, regional banks, and small-cap value stocks. If AI cloud service giants cut capital expenditures, it will serve as a catalyst for style rotation. It is recommended to adopt a defensive allocation in 2026, hedging with long-term U.S. Treasuries; small-cap value stocks and emerging market equities are expected to take over from large tech stocks and become the main beneficiaries of a long-term bull market, with "buy everything except the dollar" potentially becoming the new market theme.