S&P 500 rises as Dow, Nasdaq wobble with Fed’s rate path in focus

Investors continue to be bullish on stocks.

According to Bank of America’s latest fund manager survey released on Tuesday, cash levels have fallen to 15-year lows as traders double down on equities.

“Long Magnificent 7” remains the most crowded trade, according to 56% of respondents, followed by the US dollar and crypto.

But Big Tech hasn’t entirely been the bright star kicking off 2025.

So far this year, Meta (META) is the only one of the “Magnificent Seven” tech stocks to outperform the benchmark S&P 500 (^GSPC), after rising for 20 straight days. It’s currently on track to break that streak, though, with shares down nearly 3% in early trade on Tuesday.

And as Yahoo Finance’s Josh Schafer pointed out, the number of companies outpacing the index’s roughly 4% gain has soared to start the year.

Looking at the cross-asset performance in 2025, investors in the BofA survey now view global equities as the best-performing asset (34% versus 21% in January), overtaking US equities (18% versus 27%). Gold sits in the middle at 22%, with the safe-haven asset currently trading near record highs.

Still, certain risks remain. Some 42% of survey respondents categorized a global trade war as the No. 1 risk for assets this year. Separately, nearly 40% said a recessionary trade war is the biggest “tail risk,” ahead of inflation that leads to Fed rate hikes and the potential of an AI bubble.