Stock market today: Dow, S&P 500, Nasdaq futures slip after 2-day rally with geopolitics and Fed in focus

Investors uber bullish sentiment for US stocks came to a screeching halt over the past month.

In a global survey of 171 participants, Bank of America’s latest Global Fund Manager Survey showed the biggest drop in investor’s allocation to US equities on record.

A team of Bank of America strategists led by Michael Hartnett described the move in the March survey as a “bull crash” with investor appetite for US stocks tumbling amid the 10% drawdown in the S&P 500 (^GSPC) over the past month.

The swift nature of the correction in the S&P 500, could be seen as a buy sign. But as Hartnett’s team points out, the recent market moves are more a flushing out of uber bullishness rather than an obvious catalyst for a contrarian trade.

Hartnett wrote the current sentiment levels are nowhere near “close-your-eyes-and-buy levels.”

And as Wall Street strategists have pointed out recently, part of the reason right now might not be an obvious buy the dip moment comes back to what sent stocks down in the first place.

A chart in BofA’s survey shows 55% believe the biggest risk to markets is a “trade war triggers global recession.” This marked the highest conviction in a risk since the pandemic topped the list in April 2020.

But despite a roughly 3% pop in stocks over the past two sessions, not much has changed in the trade war or growth scare story over the past week.

Morgan Stanley chief investment officer Mike Wilson told clients, also on Sunday, that “a tradable rally” is possible in markets. But Wilson doesn’t see a sustainable rally to new record highs “until the numerous growth headwinds are reversed” or the Fed resumes interest rate cuts.