SPY: BofA's Bear Market Warning Signals Flashing, But Headline Numbers Still Strong

BofA reports 70% of its historical bear market warning signals have been triggered, with the
$SPY appearing expensive on 17 of 20 valuation metrics.
Reddit discussions highlight a widening gap between market winners and losers, with AI spending by hyperscalers potentially consuming all operating cash flow.
Corporate America is shifting from stock buybacks to AI capex, with buybacks as a percentage of market cap hitting multi-year lows.

On June 9, 2026,

$SPY ranked 4th in Reddit discussion volume, driven by a r/stocks post analyzing Bank of America's bear market warning signals. The post, which garnered 721 upvotes and 351 comments, noted that 70% of BofA's historical bear market signals have already been triggered, and the S&P 500 is trading at elevated valuations on 17 of 20 tracked metrics—some richer than during the dot-com era.

The same post appeared on r/stockmarket with 310 upvotes and 166 comments, where users debated whether the headline index strength masks underlying weakness. The gap between the biggest winners and losers inside the S&P 500 has stretched to levels not seen since 2000, according to the analysis.

Corporate Cash Shifts From Buybacks to AI Capex

A same-day

$SPY news article from Investing.com highlighted a parallel trend: corporate America is shifting capital allocation away from stock buybacks toward AI infrastructure spending. While absolute buyback values hit records in 2026, buybacks as a percentage of market cap have declined to multi-year lows, particularly among tech hyperscalers. This shift reflects the AI arms race prioritizing immediate cash investments in AI projects over shareholder returns.

The r/stocks post noted that AI spending by hyperscalers may be consuming all operating cash flow, raising concerns about market health if these ambitious AI projects fail to deliver expected profits. This aligns with the Investing.com analysis, which warns of potential risks if AI investments don't generate returns.

Reddit Sentiment and Broader Market Context

The r/stocks subreddit showed an average sentiment of 0.60 across 90 posts, while r/investing averaged 0.69 across 65 posts, indicating generally positive sentiment despite the bearish warnings. A r/wallstreetbets post analyzed sector sensitivity to CPI reports, finding Utilities and Real Estate most negatively impacted by hot inflation data, with the author planning to buy puts on those sectors instead of

$SPY.

A Benzinga article noted that U.S. stock futures rose on Tuesday following a ceasefire announcement between Israel and Iran, with the S&P 500, Dow Jones, and Nasdaq 100 all gaining in premarket trading. Analysts expect continued market resilience driven by AI investments and economic strength.

SPY

$SPY

The r/options subreddit saw a user sharing 10-month options trading results, targeting $200k in the next 12 months, using wheels and credit spreads on

$SPY,

$QQQ, and SPX. The user noted a premium capture rate of 47% and consistent PnL in recent months despite the market rally.

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