Analysts at major Wall Street firms warn current stock market conditions bear eerie similarities to the prelude to the 2008 financial crisis. Bank of America‘s Michael Hartnett noted parallels, including surging oil prices amid geopolitical tensions. Veteran strategist Ed Yardeni has raised the probability of a market meltdown this year from 20% to 35%. The primary risk stems from oil price impacts on corporate earnings and tightening financial conditions.
Several top Wall Street firms are raising red flags on the current state of the US stock market. Bank of America analyst Michael Hartnett flagged similar oil price surges before the 2008 crash. “Asset performance in 2026 is more ominously close to price action seen from mid’07 to mid’08,” Hartnett said in a note.
He added that Wall Street is “ominously trading ‘07-’08 analog.” Oil prices have climbed more than 60% this year following recent conflict. The bigger risk to stocks lies in earnings, rather than inflation, according to Hartnett.
Hartnett recommended selling oil above $100 per barrel and 30-year Treasuries above 5%. He also suggested selling the dollar when the index spot is above 100 and the S&P 500 under 6,600. Recent levels included a 30-year yield at 4.89% and the dollar gauge at its highest since November.
Bank of America isn’t the only concerned firm about the present US stock market. Veteran stock strategist Ed Yardeni stated the escalating war hurts global markets. “The US economy and stock market are stuck between Iran and a hard place currently. So is the Fed,” Yardeni wrote.
Yardeni has consequently raised the probability of a market meltdown to 35% for the rest of the year. Previously, he had assessed the probability at 20%. He noted that a persistent oil shock could pressure the Federal Reserve’s dual mandate.
