Amid the global market turmoil triggered by the Trump administration's large-scale tariff policies, Michael hartnett, Bank of America's chief strategist and known as Wall Street's most accurate analyst, issued a warning: unless the Federal Reserve steps in to rescue the market and the trade war subsides, investors should sell the S&P 500 index during any rebound.

So far this year, the S&P 500 index has fallen by more than 10%. Hartnett predicts that if Trump's tariff policies lead the U.S. economy into a shallow recession, the index could drop further to 4,800 points, implying a roughly 9% decline from Thursday's closing level.

UBS previously noted in a research report that the scale of the Trump administration's tariff policies far exceeds expectations and has fundamentally altered the investment landscape, while the market has not yet fully priced in this risk.

In a newly released research report, Hartnett stated that Trump's tariff policies and the resulting market turmoil are transforming American exceptionalism into American negationism. He advised shorting U.S. stocks before the S&P 500 hits 4,800 points and going long on two-year U.S. Treasury bonds.

Hartnett wrote in the report that higher bond yields, lower stocks, and a weaker dollar are driving a global asset liquidation, which will likely force policymakers to act. However, investors should still sell the rally in risk assets.

Although the S&P 500 posted its largest single-day gain since 2008 on Wednesday following the announcement of a pause in some reciprocal tariffs, the index resumed its decline on Thursday, indicating a lack of confidence in the rebound. Hartnett said he would maintain his short position until the Fed implements significant rate cuts to break the liquidation cycle and the trade war is put on hold.

Hartnett suggested that if policy panic leads to a recession—albeit a brief or mild one—investors could consider buying when the S&P 500 falls to around 4,800 points. However, many investors strongly disagree with this view, arguing that declining earnings expectations could push the index toward 4,000 points.