US stocks and the US dollar rebounded after hitting bottom, but Bank of America warned investors to sell on rallies. Currently lacking conditions for sustained growth.

With Trump's attitude towards tariff policies easing, changing his mind about firing Fed Chairman Powell, and Fed officials signaling a rate cut, US stocks and the US dollar have rebounded in recent days. However, US bank strategists suggest that investors should sell high in the rebound of the US dollar and warn that the conditions to support its continuous rise are not yet in place. Led by Michael Hartnett, the Bank of America strategists team stated that the US dollar is in a long-term depreciation phase, and there is still room for further outflow of funds from US assets. The strategists say this trend will continue until the Fed starts cutting rates, the US reaches a trade agreement with China, and consumer spending remains strong. The strategists stated, "The 'pain trade' in the current market is undoubtedly driven by the surge in US stocks and the US dollar led by the 'Magnificent Seven'." They mentioned that only when the aforementioned conditions are met can the S&P 500 decisively break through the current key support and resistance levelscurrently estimated at 5,690 points, close to its 50-week moving average. Data shows that the S&P 500 fell 19% from its February peak but has recovered nearly half of the decline with intervention from investors buying on the dip. The Bloomberg US Dollar Index has already fallen 6.3% this year. The strategists pointed out that the depreciation of the US dollar is the "clearest investment theme." They believe that the appearance of DeepSeek earlier this year represented the peak of the "American exception" theory, with Trump's policies triggering fiscal easing in Europe and his tariff rhetoric signaling the beginning of globalization's decline. The strategists added, "The weakening of the US dollar will be manifested through a slow decline in interest rates or a rapid rise in interest rates. This has already been clearly indicated in the surge in gold prices." They also stated that the theme of a weakening US dollar will lead to an increase in global asset allocation in commodities, emerging markets, and international stocks, such as Chinese tech stocks and European and Japanese bank stocks.