Bank of America’s head of U.S. equity and quantitative strategy, Savita Subramanian, said in an interview with Bloomberg TV that the S&P 500 may not even provide returns of 5% over the next 10 years.

  • Meanwhile, U.S. 10-year Treasury yield hit a 24-year high of 5.364% on Wednesday, and the U.S. 30-year Treasury yield was trading at 5.708% at the time of writing.
  • The strategist said the market looks healthy and is not reminiscent of the tech bubble of 2000, but she worries “that sentiment has gotten very bullish.”
  • Earlier on Wednesday, long-term bond market bear Jim Bianco, President and Macro Strategist at Bianco Research, also said that bonds are finally trading at fair value, making it a good time to invest in them.

Bank of America’s head of U.S. equity and quantitative strategy, Savita Subramanian, believes bond markets are becoming interesting again and may compete with the S&P 500.

In an interview with Bloomberg Television on Wednesday, the strategist said that in the long term, bonds appear to be providing higher returns than stock markets. 

Bonds Vs Stocks: What’s The Outlook?

Subramanian said that, under the bank’s valuation framework, the S&P 500 may not even provide 5% returns over the next 10 years. 

Meanwhile, she noted that the risk-return for a 10-year U.S. Treasury today is trending around 5% levels.

The U.S. 10-year Treasury yield hit a 24-year high of 5.364% on Wednesday, reaching its highest level since early 2002. At the time of writing, it was at 5.32%. Meanwhile, the U.S. 30-year Treasury yield was trading at 5.708% at the time of writing. 

Subramanian said, “When you look at bonds on a risk-adjusted basis, for the first time in decades, bonds actually look interesting again.” 

Earlier on Wednesday, long-term bond market bear Jim Bianco, President and Macro Strategist at Bianco Research, also said that bonds are finally trading at fair value, making it a good time to invest in them.

Bianco said long-dated bonds now offer fundamentally appropriate interest-rate levels, making bonds attractive again after years of being expensive.

BofA’s Subramanian Flags That S&P 500 Expectations May Be Inflated

The strategist said in the interview that while the market looks healthy and is not reminiscent of the tech bubble of 2000, she said that she worries “that sentiment has gotten very bullish.”

Subramanian said analysts expect the S&P 500 to post its strongest earnings growth in four decades over the next five years. “I feel like when expectations are this high, you're more primed for disappointment than actual positives.”

She added that there is a natural slowdown in earnings growth and the gains are largely one-time posts from tech companies. “So a slowdown is inevitable almost,” adding that AI infrastructure bottlenecks could pressure corporate margins, especially as markets are already pricing in margin expansion.

“So I think the idea that we're expecting this sort of frictionless environment where CapEx is gonna surprise higher, but revenues from AI are gonna surprise higher. Everything's gonna be okay. Rates are gonna stay low. Spreads are gonna stay tight. It just all feels a little bit difficult,” she said. 

Stocks Vs Bonds: 2026 Performance

U.S. 10-year Treasury yields have outperformed benchmark stock indexes so far in 2026, posting gains of nearly 27%. Meanwhile, the Invesco QQQ Trust (QQQ), which tracks the tech-heavy Nasdaq, has gained about 24% in the same time. 

The SPDR S&P 500 ETF (SPY) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) have increased about 15% and 7.5%, respectively. 

The 30-year U.S. Treasury has outperformed the S&P 500 and the Dow, but has lagged behind the Nasdaq. 

On Stocktwits, retail sentiment around SPY, QQQ, and DIA was ‘extremely bullish’ at the time of writing. 

Meanwhile, retail sentiment around iShares 20+ Year Treasury Bond ETF (TLT) was ‘bullish.’

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