Bank of America: If the Fed cuts rates dovishly next week, the "Santa Claus rally" may be over.

Odaily Planet Daily reports that Bank of America strategists say the year-end stock market rally could be threatened if the Federal Reserve's economic outlook next week is overly cautious. The S&P 500 (SPX) is currently near record highs, and investors are confident in the best-case scenario of a Fed rate cut, falling inflation, and resilient economic growth. However, a dovish signal from the Fed at next week's meeting could test this optimism—as it could suggest a larger-than-expected economic slowdown. Analyst Michael Hartnett wrote in a report, "The only thing that could stop a Santa Claus rally is a dovish Fed rate cut triggering a sell-off in long-term Treasury bonds." (Jinshi)