In response to Financial institution of America, the market continues to be not out of the woods regardless of the current pullback. “Optimism round a delicate touchdown and 1H23 price lower after Jackson Gap has waned, and there are nonetheless no actual indicators of a brand new bull market,” mentioned Savita Subramanian, Financial institution of America’s head of US fairness and quantitative technique. mentioned in a be aware. After a brutal first half of the yr, the S&P 500 has rebounded almost 8% from its 52-week low since June 17, main some buyers to imagine the market has turned the nook. Nevertheless, the market offered off once more in current weeks. The S&P 500 is on observe for its third straight weekly decline, as Federal Reserve officers reaffirmed their dedication to aggressive price hikes to squash inflation. The dovish rhetoric, notably Fed Chair Jerome Powell’s feedback final week, has additionally brought on fears of a recession to return to the market. Powell vowed on Friday to proceed tightening coverage in a method that might trigger “some ache” to the US financial system. Even with 4 consecutive rate of interest hikes totaling 2.25 share factors, Powell mentioned it is “no place to cease or cease.” Powell’s feedback helped erase what would have been a month-to-month acquire for the most important averages. As an alternative, the Dow Jones Industrial Common ended August down almost 4.1%, whereas the S&P 500 and Nasdaq 100 posted month-to-month losses of 4.2% and 4.6%, respectively. Subramanian mentioned the market is but to see the complete impression of the Fed’s quantitative tightening. The strategist set his year-end S&P 500 goal at 3,600, which might translate to a 9% decline from Wednesday’s shut of three,955. “Based mostly on the historic relationship between quantitative easing and the market, the deliberate QT represents a 7% market decline,” Subramanian mentioned. Many high-profile buyers echoed Financial institution of America’s bearish sentiment. Jeremy Grantham, the well-known investor with a historical past of calling market crashes, mentioned the burst of the multiple-asset bubble he is been warning about has but to occur. In the meantime, DoubleLine Capital CEO Jeffrey Gundlach urged buyers to heed indicators of a worsening recession from the bond market. —CNBC’s Michael Bloom contributed to this report.