Investor concerns over a potential global trade war are escalating, with 42% of fund managers in Bank of America’s latest survey citing it as the biggest risk to risky assets in 2025—up from 30% in January.
The prospect of a trade war-induced recession has now overtaken inflation and interest rate hikes as the top “tail risk,” with 39% of respondents seeing it as the most significant threat, compared to 28% still focused on monetary policy. Just a month earlier, rising bond yields were viewed as the biggest danger, highlighting how quickly market sentiment has shifted.
At the same time, investors continue to express caution over U.S. equities, with 89% of those surveyed believing they are historically overvalued—the highest percentage since at least April 2001. This sentiment has remained persistent over the past decade, with an average of 81% of fund managers regularly seeing U.S. stocks as overpriced. Despite these concerns, markets have so far remained resilient, though heightened geopolitical tensions and economic uncertainty could put pressure on valuations in the months ahead.
This guy loves this: “average of 81% of fund managers regularly seeing U.S. stocks as overpriced”