📊 BULL MARKET MANIA: Fund Managers Post Record Equity Boost in May

Global fund managers executed the largest one-month increase in stock allocations on record in May, driven by blockbuster corporate earnings and unshakable optimism that the Federal Reserve will eventually cut interest rates. According to the Bank of America (BofA) monthly global survey published on Tuesday, May 19, 2026, Wall Street is aggressively chasing equity upside despite a brutal parallel rout in the global bond market.

The Key Numbers (BofA Survey Data):

• The Survey Scale: BofA polled 200 institutional allocators managing a combined $517 billion in assets between May 8 and May 14, 2026.
• The Stock Surge: A net 50% of fund managers reported being overweight equities, marking a staggering leap from just 13% in April—the largest single-month jump in survey history.
• Cash Draws Down: Cash allocations dropped to 3.9% (down from 4.3% in April), signaling that managers are capitulating and deploying their defensive reserves directly into the stock market.
• The Macro Outlook: 39% of managers now predict a “no-landing” economic scenario (where growth stays strong and inflation persists), while a mere 4% fear a sudden economic “hard landing.”

The Great Geopolitical & Inflation Disconnect: Stock indexes continue to hover near all-time highs in defiance of extreme macroeconomic headwinds that have knocked global bonds to decade lows.

• The Strait of Hormuz Standoff: Despite peace negotiations between the U.S. and Iran remaining completely gridlocked and crude oil sitting stubbornly above $100 a barrel, 66% of respondents confidently expect the vital trade bottleneck to clear within the next few months.
• The Bond Fear: Wall Street isn’t blind to inflation, but it is choosing to ignore it in favor of AI earnings. A net 40% of managers cited a secondary wave of inflation as the market’s single biggest “tail risk.”
• Targeting 6% Yields: Reflecting deep structural anxiety over fixed income, 62% of respondents expect the 30-year U.S. Treasury yield to climb all the way to a crushing 6% (up from its current 5.14% level). Only 20% believe yields will fall back to 4%.

The Bottom Line: Institutional investors are trapped in a profound paradox. While they actively predict that consumer inflation will re-accelerate and send long-term bond yields skyrocketing toward 6%, they are simultaneously dumping cash to buy stocks at record valuations. Driven by the AI spending boom, Wall Street is betting that corporate earnings power can outrun a tightening macroeconomic vise.