Bank of America (NYSE: BAC) stock rose to $47.76, gaining $0.66 or 1.40% in early trading Friday, as investors reacted to a striking warning from one of the bank’s top strategists that current market conditions are starting to resemble the dangerous setup seen before the 2008 financial crisis.
The caution comes from Bank of America chief investment strategist Michael Hartnett, who said recent asset price movements are beginning to look “ominously close” to the pattern seen between mid-2007 and mid-2008 — the period leading up to the global financial meltdown.
Hartnett highlighted several factors that are raising alarm bells on Wall Street, including soaring oil prices driven by geopolitical tensions, growing risks in the private credit sector and tightening financial conditions that could pressure corporate earnings.
BAC stock rises despite growing macro warnings
Shares of Bank of America climbed to $47.76 (+1.40%) as investors continued buying large-cap bank stocks even while strategists warned about broader financial risks building in the global economy.
The gain reflects confidence that major US banks remain stronger than they were before the last crisis. After years of tighter regulation, higher capital requirements and regular stress testing, many analysts believe the largest lenders are better positioned to handle economic volatility.
Still, Hartnett’s comments suggest investors may be overlooking deeper structural pressures that are beginning to form beneath the surface of financial markets.
Oil surge and Iran war fueling market fears
One of the key parallels Hartnett pointed to is the surge in oil prices. During the run-up to the 2008 financial crisis, crude oil doubled from around $70 per barrel in mid-2007 to about $140 by August 2008.
In 2026, oil prices are once again climbing rapidly. The escalation of the Iran conflict that began on February 28 has pushed oil prices more than 60% higher this year, raising concerns about inflation and the possibility of stagflation — a dangerous combination of rising prices and slowing economic growth.
Higher energy costs can ripple across the entire economy, increasing transportation expenses, raising production costs for companies and squeezing consumer spending power.
If inflation rises as a result, central banks may be forced to maintain tighter monetary policy even as economic growth slows.
Private credit market risks emerging
Another major concern highlighted by Bank of America strategists is the rapidly expanding private credit market.
Private credit has grown significantly in recent years as banks reduced their exposure to certain types of leveraged lending and private funds stepped in to fill the financing gap. However, that expansion is now attracting scrutiny.
Some private credit funds have begun facing redemption pressures, while questions are being raised about underwriting standards and the ability of certain borrowers to handle higher interest rates.
Strategists are also examining how artificial intelligence could disrupt some business models, potentially weakening borrowers that rely heavily on older technology or labor-intensive operations.
Bank of America strategist Sebastian Raedler recently said there are “a lot of rumblings in the credit sector,” adding that some of the developments bear similarities to early warning signs seen before the 2007 financial crisis.
Central bank policy mistakes remain a major risk
Hartnett also pointed to the role central bank policy played in worsening the last crisis. In July 2008, the European Central Bank raised interest rates on the same day oil prices peaked — a move that was later widely criticized.
That rate hike quickly turned into what Hartnett described as “one of the greatest policy mistakes of all time.”
Within just 74 days, the ECB was forced to reverse course and cut interest rates by 325 basis points as the collapse of Lehman Brothers triggered a global financial panic and oil prices plunged to about $40 per barrel.
Today, similar concerns are resurfacing. Some policymakers in Europe have already suggested that inflation risks from the Middle East conflict could force earlier-than-expected rate increases.
Those decisions could become complicated if growth slows at the same time.
Key market levels investors are watching
Hartnett outlined several market thresholds that investors should monitor closely in the coming months.
He suggested selling oil if prices move above $100 per barrel, trimming exposure to 30-year US Treasury bonds if yields rise above 5%, and reducing holdings of the US dollar when the dollar index climbs above 100.
He also pointed to a key level for the stock market itself, warning that risks could increase if the S&P 500 trades below 6,600.
Recently the benchmark index closed near 6,673, indicating markets are already hovering close to that level.
Investors can track broader market performance through the S&P 500 index, while real-time trading data for Bank of America stock is available on Yahoo Finance.
Earnings pressure may become the bigger risk
While many investors are focused on inflation, Hartnett believes the greater threat to stocks may actually come from corporate earnings.
If oil prices remain elevated and financial conditions tighten further, companies could face shrinking profit margins and weaker demand.
That environment would create additional pressure on equity markets and potentially trigger a broader revaluation of risk assets.
For now, investors appear to believe that the Iran conflict will remain limited and that issues within private credit markets will not become systemic.
This belief is helping support bullish positioning across global markets.
However, Hartnett warned that such optimism may be premature if geopolitical tensions escalate further or if credit stress begins spreading across financial markets.
For Bank of America shareholders, the stock’s rise to $47.76 reflects confidence in the strength of major US banks. But the strategist’s warning suggests investors may want to keep a close eye on the broader forces shaping markets in 2026.
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