Bank of America technical analyst Paul Ciana is warning that the second quarter looks challenging for equities, bonds, and gold.
His March 27 report sees the US dollar and oil as the two assets best positioned to hold strength into mid-year. Most everything else faces downside risk.
Recent market moves have reinforced earlier BofA forecasts. Rising Treasury yields, a firmer dollar, and higher oil prices are all tracking in the direction the bank expected. Ciana says those trends are likely to continue unless a clear macroeconomic resolution triggers a sharp reversal.
What Ciana said about the S&P 500
The S&P 500 is at the center of the bear case. Ciana identified a topping pattern after the index made a modest new all-time high in Q1 but fell short of its upside target.
“After a modest new all-time high in Q1 that fell short of target, a wedge top and rounded top formed,” the note said. “The close below the 20-week SMA on March 6 signaled a downtrend. Downside risk in Q2 includes 6,340 / 6,175 / 6,000. The 20-week SMA near ~6,810 is key resistance and may guide a decline. We do not yet see capitulation signals.”
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That last line matters. Ciana is not calling a bottom. The downtrend is in place. The technical structure suggests further weakness before any durable low is established.
Bonds and the 30-year yield
Treasury yields are a key focus. Long-term rates have broken higher and could continue climbing.
Ciana flagged the 30-year yield as potentially reaching around 5.4% in the coming months. That level would reflect persistent inflation concerns tied to geopolitical tensions and elevated commodity prices.
A 30-year yield at 5.4% would be a meaningful tightening of financial conditions. It would put additional pressure on equities and rate-sensitive sectors across the board.
Dollar strength and gold’s correction
The dollar is one of BofA’s clearest conviction calls. Ciana said DXY is forming a base after an extended period of consolidation. Technical signals point toward new 52-week highs.
“Since June 2025 we have preferred long USD positioning, particularly against commodity importers,” BofA said. “A DXY that bottoms and trends to new 52-week highs such as the 200-week SMA near ~103 implies broader USD strength and increased pressure on exporters.”
Gold is expected to suffer in this environment. After its strong run, Ciana sees an extended correction through Q2 and Q3.
“We expect an extended correction to persist in Q2-Q3, to fade a Q2 bounce, and to see a test of $4,000/oz, if not $3,700, as the direction of travel for now is sideways to lower,” according to BofA.
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Oil is also part of the view. After a sharp rally earlier this year, prices are expected to trade in a $90 to $100 per barrel range. Upside risk persists if supply concerns continue. That range keeps inflation elevated and maintains pressure on the Fed.
What BofA expects across major assets in Q2
- S&P 500: Downtrend in place. Downside targets at 6,340, 6,175, and 6,000. Resistance near 6,810. No capitulation signals yet.
- 30-year Treasury yield: Breaking higher, potentially toward 5.4%.
- US dollar (DXY): Forming a base, targeting new 52-week highs around the 200-week SMA near 103.
- Oil: Expected range of $90 to $100 per barrel, with upside risk if supply concerns persist.
- Gold: Extended correction in Q2-Q3. Downside targets at $4,000 and potentially $3,700.
What could change the picture
Ciana highlighted “policy put” levels where governments may respond if market stress intensifies. Those thresholds could limit how far markets fall before policymakers step in, particularly as US elections approach.
A sharp reversal is possible if a clear resolution emerges. The most likely candidates are a material drop in oil prices tied to an Iran conflict resolution, a softer inflation reading that revives Fed cut expectations, or a direct policy intervention.
Until one of those triggers materializes, BofA’s read points to a market environment defined by higher rates, a stronger dollar, and limited support for traditional safe havens.
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