The Bank of America Industrial Momentum Indicator recorded a second straight monthly decline following a pronounced rise that began in fall 2025 and carried into early 2026, the bank said.
According to the report, several components that feed the indicator - notably copper prices, fund manager expectations and positioning, and the BofA Truck Shipper Survey - appear to be hitting a ceiling in the face of broader macroeconomic uncertainty. Despite this recent pullback, the report emphasized that the underlying trajectory remains positive after the indicator troughed in the third quarter of 2025.
Historically, the indicator has tended to lead revisions to industrial earnings estimates and movements in the Purchasing Managers’ Index (PMI). The PMI itself had been range-bound at a neutral reading for roughly three years until a breakout in January. That breakout now faces fresh obstacles: the report points to an energy shock and conflict in the Middle East as potential drags on sentiment and on the industrial investment cycle.
BofA analysts continue to monitor sector surveys for early signals. The Fluid Power Survey, compiled by analyst Andrew Obin, showed a distinct upward trend at the start of 2026. Meanwhile, Ken Hoexter’s Truck Shipper Survey registered a modest pullback but remained at elevated levels despite typical seasonal declines, the ongoing war and higher fuel prices.
The report also set out watchlists tied to the indicator’s path. If the momentum indicator fails to resume its ascent, BofA’s fundamental analysts flagged Northrop Grumman, CSX Corporation, Fastenal and Republic Services. Conversely, should the indicator get back on an upward trajectory, the analysts highlighted General Electric, Rockwell, Knight-Swift and PACCAR as names of interest.
Market participants will be watching whether the indicator stabilizes and resumes its prior climb or whether the current pullback signals a more sustained cooling in industrial activity. The mix of commodity, positioning and survey data suggests a period of close observation as investors and corporates assess investment timing amid heightened geopolitical and energy-related risks.