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Markets Score 35 Bullish

BofA Strategist Forecasts Sector Rotation Amid May Economic Uptick

May 01, 2026 14:34 UTC
Short term

Bank of America's Michael Hartnett anticipates a cyclical increase in economic activity throughout May. The strategist suggests that the current semiconductor boom will trigger a shift in sector preferences.

  • Cyclical economic growth expected for May
  • Semiconductor strength serving as a leading indicator
  • Predicted reversal in sector favorability
  • Potential rotation from overextended sectors to undervalued cyclicals

Michael Hartnett, a prominent strategist at Bank of America, has outlined his expectations for market movement in May, predicting a cyclical uptick in broader economic activity. The forecast is primarily underpinned by the ongoing surge in the semiconductor industry, which Hartnett views as a leading indicator for wider economic expansion. This momentum is expected to catalyze a rotation in investor sentiment across the equity markets. According to the analysis, the current market environment is ripe for a reversal. Sectors that have recently been out of favor may see renewed interest as the cyclical recovery takes hold, potentially balancing the current concentration of gains. For traders, this suggests a potential pivot away from the most crowded trades. While the semiconductor sector has provided the initial spark, the broader implication is a redistribution of capital across various cyclical industries as economic activity accelerates.

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