Bank of America’s Sell Side Indicator registered a modest decline in March, falling to 55.7% from 56.0% the prior month. The 30-basis-point decrease represents the first downshift in the average equity allocation recommended by sell-side strategists in more than six months.
The timing of the reduction coincided with a 5% drop in the S&P 500 during March, the index’s worst monthly showing in a year. Bank of America attributed the market weakness to geopolitical concerns that pressured equities over the month.
Measured against prior shifts, the March move was relatively small - roughly one-fifth the magnitude of the decline that followed a tariff announcement in April 2025. The Sell Side Indicator tracks the average allocation to equities suggested by sell-side strategists for a balanced fund. At 55.7%, the gauge remains closer to a "Sell" signal than a "Buy" signal - 1.9 percentage points from Sell versus 4.4 percentage points from Buy - and sits well below readings historically observed at market peaks, which have been above 59%.
Bank of America calculated that the indicator’s present level implies a 12.5% price return for the S&P 500 over the coming 12 months. Separately, the firm maintained its year-end S&P 500 target of 7100, a projection that corresponds to a 9% price return from current levels.
On profitability, Bank of America kept its earnings forecast for the S&P 500 at $310 per share for the year, which it said equates to 13% year-over-year growth. The bank noted that consensus estimates for S&P 500 earnings in 2026 rose by 2% in March, pushing expected year-over-year growth for 2026 to about 17%.
Valuation measures also shifted modestly. The index’s forward price-to-earnings ratio currently stands roughly 15% below its late-October peak, reflecting both the recent pullback in prices and upward moves in earnings estimates.
On the macroeconomic front, Bank of America’s economists trimmed their 2026 U.S. real GDP growth projection to 2.3% from 2.8%, citing higher oil prices as the reason for the downgrade. Despite that adjustment, the firm said S&P 500 earnings per share should still deliver healthy double-digit growth absent a further material downgrade to the economic outlook, noting that energy costs make up a relatively small portion of total S&P 500 operating costs.
Summary
Bank of America’s Sell Side Indicator eased to 55.7% in March after a 5% monthly decline in the S&P 500 driven by geopolitical concerns. The indicator remains nearer to a Sell signal than a Buy, and the bank held its year-end S&P 500 target and earnings forecasts unchanged while trimming its 2026 GDP outlook due to higher oil prices.