Bank of America strategists said investor bullish sentiment has reached extreme levels and advised reducing exposure to risk assets. According to ChainCatcher, the bull-bear index rose from 9.4 to 9.7, its highest level since 2021.

The strategists said the rise in equities, inflows into higher-yield bond funds, and narrower credit spreads have fueled optimism. Hartnett said the market remains in a summer "retreat/rotation" phase and recommended shifting toward defensive assets and the U.S. dollar.