Bank of America calls for defense, high interest rates + AI solo performance, I’m familiar with this script, a 2000 bubble déjà vu.

Bank of America strategist Hartnett warns that the structure of the U.S. stock market is nearing the key characteristics of the top of the 2000 bubble. He says the risks are rising in the late stage of the bull market and recommends gradually shifting to defensive allocations. Although the S&P hit new highs in May, only about 20 constituent stocks set new highs, and most of them came from AI and semiconductors. The recent uptrend has been driven by the AI chain, with related stocks surging, and the Nasdaq rose significantly in April and May. However, market breadth is weakening: about 55% of constituent stocks are above the 200-day moving average, the advance-decline line has fallen back, and the number of stocks making new highs is declining. Hartnett believes the high-interest-rate environment could become a turning point and advises gradually increasing allocations to long-term bonds and defensive industry sectors to reduce the risk of subsequent pullbacks.