BofA Warns Two Market Gauges Signal a Big Risk-Off Event

The MOVE index, Wall Street's gauge of expected Treasury market volatility, has jumped 33% in just the last two days — and Bank of America says that surge, combined with a selloff in financial stocks, may signal a serious shock to markets.

The warning comes from BofA analysts led by Michael Hartnett, writing in the Flow Show report published Friday. Their argument rests on a confluence of events in two corners of the market that rarely make noise together: the Treasury market and the banking sector.

The first signal is the MOVE index, which measures expected volatility in the Treasury market. A reading that climbs 33% over two sessions marks an abrupt jump in bond-market anxiety. Investors use the index much as equity traders use the VIX — as a real-time thermometer of how much turbulence the options market is pricing in.

The second signal is financial stocks. Hartnett and his team flagged a selloff in the sector, and the pairing matters. When bond-market volatility spikes at the same time banks and other financial shares are under pressure, BofA argues, the combination can precede a big risk-off event — a broad, disorderly retreat from risky assets rather than an orderly rotation.

The read comes from the bank's closely followed weekly flow analysis, which tracks where money is moving across stocks, bonds and cash. Hartnett's team built its case on the two gauges in tandem rather than either alone. A jump in the MOVE index by itself signals stress in Treasurys. A dip in financial stocks by itself can reflect sector-specific noise. Together, according to BofA, they form a pattern that has historically pointed to nastier outcomes for the wider market.

The timing adds to the tension. Equity benchmarks sit near record territory — the S&P 500 trades around 7,704 — while the VIX, the equity volatility gauge, has eased to roughly 15. Complacency in stocks set against a sharp rise in bond-market anxiety is precisely the mismatch BofA's signals capture.

The backdrop for the anxiety sits in the Treasury market itself. The 10-year Treasury yield stands near 5.185%, an elevated level that keeps pressure on valuations across risk assets and on the funding costs that matter most to banks and other financial firms. That helps explain why the two gauges move together: financial stocks are direct lever on the rates and volatility environment that the MOVE index measures.

MarketWatch's Jamie Chisholm reported the findings on Sept. 25, 2026, describing the combination as one that "may mean a serious shock to markets."

For investors, the actionable takeaway is narrow but clear. BofA has not called an outright crash; it has identified two concurrent warning lights — surging expected Treasury volatility and weakness in financial shares. Whether those lights flash briefly or stay on will depend on how the bond market settles. If the MOVE index keeps climbing and bank stocks keep sliding, Hartnett's risk-off scenario moves from contrarian warning to consensus concern.