The bull market for stocks is defying everything, but Bank of America warns that an autumn reality check is coming

The stock market’s resilience has been striking, with major indices climbing despite persistent macroeconomic headwinds. Yet Bank of America strategists caution that this momentum may face an autumn reality check. They identify two potential catalysts that could test the bullish narrative: the U.S. midterm elections and a possible end to the conflict involving Iran.

Midterms historically inject a degree of political uncertainty, as markets sometimes adjust to shifting policy expectations after the vote. Similarly, a cessation of the Iran war could reduce geopolitical risk premiums, potentially weighing on energy prices and the sectors that have benefited from elevated volatility. Both scenarios would represent a meaningful shift in the backdrop that has supported equities.

For investors, the takeaway is less about predicting outcomes and more about preparing for a possible recalibration. The coming months merit close attention to election developments and diplomatic progress in the Middle East. Should those areas evolve as BofA anticipates, the market’s current complacent tone could give way to a more cautious one, making it a period worth watching carefully.