Trading Catalysts

Latest edition · September 21, 2026

Trading Catalysts Watch Fedspeak; two more hikes remain in view

BofA expects two additional Federal Reserve rate hikes in October and December, focusing on an active week of Fedspeak amid a light data schedule. Although the year-end S&P 500 target was raised to 7400, strategists urge caution on credit and EPS quality while recommending large-cap value ETFs and risk-limited QQQ calls to play AI upside.

In this edition of Trading Catalysts, BofA Global Research emphasizes upcoming Fedspeak to validate their call for two additional rate hikes in October and December 2026. While US equities continue to show resilience due to structural AI momentum, US Equity Strategist Savita Subramanian warns of elevated sell-off risks into year-end driven by tight financing costs and deteriorating earnings quality, despite raising the 2026 S&P 500 target to 7400. To navigate this backdrop, BofA recommends positioning in large-cap value ETFs (PWV, PVAL, AVLV), paying 2Y rates, and utilizing short-dated QQQ calls to exploit asymmetric upside in technology.

Key takeaways from the latest edition

• 1.BofA economists maintain their call for two additional Federal Reserve interest rate hikes in October and December, with a heavy slate of Fedspeak providing key policy signals.
• 2.Savita Subramanian raised the S&P 500 year-end 2026 target to 7400 and introduced a 12-month target of 7800, but warns of elevated year-end sell-off risks due to worsening EPS quality, inflation, and higher financing costs.
• 3.The derivatives strategy team suggests buying dips in tech using short-dated QQQ call options to capture asymmetric upside while managing downside risks given persistent AI demand and depressed call volatilities.

What this series covers

• Watch Fedspeak this week; two more hikes remain in view
• Eq strategy: Cautious on inflation, Fed, EPS quality, credit
• Derivs: Buying the dip in tech
• Instruments
• ETF Research
• Economics
• Companies reporting this week
• Conference calls

Edition archive

• Trading Catalysts Watch Fedspeak; two more hikes remain in view

  September 21, 2026

• Trading Catalysts Time for a Fed hike; and BofA Real Estate conference

  September 14, 2026

• Trading Catalysts Time for a Fed hike; and BofA Real Estate conference

  September 14, 2026

• Trading Catalysts CPI and the path for Fed hikes; long end buyback; and Oracle earnings

  September 8, 2026

• BofA Trading Catalysts Hawks circle the AI rally 20260608

  June 8, 2026

• BofA Trading Catalysts Retail earnings wave, NVDA, FOMC minutes 20260518.pd

  May 18, 2026