S&P 500 REMAINS EXPENSIVE, BofA SEES FURTHER DOWNSIDE The S&P 500 is still costly, expensive on 18 of 20 valuation metrics, with four near record highs, according to Bank of America. • BofA expects earnings-driven PE compression despite robust EPS forecasts (+14%). • Software stands out as 2026’s worst-performing sector, down 20% YTD, with valuations near decade lows amid AI concerns. • Key factors pressuring multiples: earnings downgrades after price drops, a surge in IPOs, rising leverage, and historical patterns showing strong EPS years often see PE compression. • BofA maintains a year-end S&P 500 target of 7,100, warning a quick rebound is unlikely.(*Walter Bloomberg)