Bank of America Warns U.S. Stock Rally Overly Concentrated, Mirrors 2000 Dot-Com Bubble Peak

According to Bank of America's chief investment strategist Michael Hartnett, on June 1, the current U.S. stock market structure shows striking similarities to the 2000 dot-com bubble peak. Only 20 S&P 500 component stocks hit new highs as the index reached record closing levels in late May, with most concentrated in artificial intelligence and semiconductor sectors—mirroring the concentration pattern observed in March 2000.

The rally was led by AI-related gains: Micron Technology (MU) surged 87.8%, SK Hynix rose 81%, AMD climbed 45.6%, and Samsung Electronics gained 43% in May. The Nasdaq Composite index surged 25% over April and May combined, marking its best two-month performance in over two decades. However, market breadth indicators are deteriorating: only 55% of S&P 500 stocks remained above their 200-day moving average as of May 20, and the Advance-Decline Line has been declining since mid-April.