When BlackRock (BLK) turns more bearish on equities, it signals a warning for analysis was prepared by BlackRock analysts Jean Boivin, Rick Rieder and Wei Li.
Consequently, the group lowered its stance on U.S. equities to Neutral.
“Higher yields and potentially excessive Fed tightening expectations create room to unwind our U.S. <a BlackRock's team said. "We upgrade Treasuries, favoring short-term bonds. In turn, we take profits: downgrading U.S. equities to neutral to manage potential volatility around the AI buildout."
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Nevertheless, they stay positive on AI stocks despite the new worries.
“We retain our conviction in AI fundamentals and preference for AI within U.S. equities,” the strategists added.
The stock downgrade by BlackRock arrives at a fragile moment for non‑AI segments of the market. Selling pressure has intensified as U.S. Treasury yields climb, increasing capital costs for firms that lag behind AI‑driven growth.
About 84% of S&P 500 (^GSPC) stocks are now trading at least 10% below their all‑time highs, according to new analysis from the Kobeissi Letter.
What’s more, 59% of S&P 500 stocks are down at least 20% from their highs, 41% are down more than 30%, and 17% are off by more than 50%.
“I would say [it’s] not a crisis but an eye‑opener, and it’s something I think you’ve got to think about,” Rieder said about the move in yields on Sozzi Unleashed in late September.
