PANews reported on December 5th that, according to Jinshi, Bank of America strategists stated that the year-end stock market rally could be threatened if the Federal Reserve's economic outlook next week is overly cautious. Currently, the S&P 500 (SPX) is nearing record highs, and investors are confident in the best-case scenario of a Fed rate cut, falling inflation, and resilient economic growth. However, Bank of America strategist Michael Hartnett stated in a report that if the Fed releases dovish signals at next week's meeting, this optimism could be tested—as it could suggest a larger-than-expected economic slowdown. "The only thing that could stop a Santa Claus rally is a dovish Fed rate cut triggering a sell-off in long-term Treasuries," Hartnett wrote in the report, referring to longer-term U.S. Treasury bonds.

The S&P 500 is currently only about 0.5% away from its October peak, and seasonal trends typically favor a year-end rebound. However, due to the government shutdown, key employment and inflation data will be released later in December, posing two major risk events to the market. Hartnett and his team also pointed out that the US government may intervene to prevent high inflation and unemployment from rising to 5%.