BofA Survey: Investor Optimism Hits Post-February High on AI and Fed Hopes

Key Facts

Reflecting a significant shift in market sentiment, Bank of America’s Global Fund Manager Survey reveals that investor optimism has surged to its highest level since February. This rebound is primarily fueled by massive capital expenditure in Artificial Intelligence and mounting expectations for Federal Reserve monetary easing. According to the report, investor cash holdings plummeted to an 'ultra-low' 3.6% in July, down from 4.1% in June, signaling a decisive move away from defensive positions toward risk assets.

This surge in confidence aligns with broader sector trends where AI infrastructure spending remains a primary catalyst; recent industry analysis suggests that hyperscale cloud providers are significantly increasing their hardware budgets compared to last year. Contextually, the sentiment shift occurs as US trade data showed a deficit of $77.6 billion on July 7, 2026, per market data, which was narrower than the forecasted $78.5 billion. This macroeconomic stability, combined with AI enthusiasm, has encouraged fund managers to reduce their cash buffers to multi-month lows.

Looking ahead, the market's focus shifts to the FOMC Minutes scheduled for release on July 8, 2026, which will be critical in validating the dovish expectations currently priced in by fund managers. Additionally, China's inflation data and US Initial Jobless Claims on July 9, 2026, will serve as vital indicators of global economic momentum.