How the ‘AI put’ has become the only thing that matters for stocks

While much of the market's attention has focused on rising global bond yields as a potential trigger for equity weakness, strategists at BofA Global Research suggest the more consequential risk may lie elsewhere. The firm's analysis points to what it calls the "AI put" — the idea that expectations around artificial intelligence have become the dominant support for U.S. stock valuations, potentially overshadowing traditional macro drivers like interest rates.

For investors, the concept is worth understanding as a framework rather than a signal. If AI-related optimism is doing much of the heavy lifting in equity pricing, then any shift in that narrative — whether from disappointing earnings, slower adoption, or doubts about returns on AI investment — could matter more than a move in Treasury yields. That is a meaningful change in how market risk is distributed.

What to watch: upcoming earnings commentary from major AI-linked companies, capital spending trends, and whether bond yields rise gradually or sharply. The key question is whether AI enthusiasm remains a durable support or has become a single point of failure.