BofA warns European stocks face 9% further drop as bond yields stay high

BofA reiterates a negative stance on European equities after a 4% decline last month pushed the Stoxx 600 to a two-month low, forecasting a further 9% drop by early next year. The bank argues that easing yield pressures would support stocks, but tight monetary policy and overly optimistic AI investment expectations leave ample room for disappointment. This signals a bearish macro outlook for European risk assets.