US stocks are set to decline in the event of dovish signals from the Federal Reserve at the Jackson Hole economic symposium after this week’s record-breaking rally, according to Bank of America Corp. strategists.

The team led by Michael Hartnett said investors have flocked into risky assets from equities to cryptocurrencies and corporate bonds on optimism that the central bank will reduce interest rates to shore up a weakening labor market and ease the US debt burden.

A dovish tone from Fed Chair Jerome Powell at the conference in Wyoming on Aug. 21-23 could see stocks sliding as investors “buy rumor, sell fact,” Hartnett wrote in a note. He reiterated a preference for international equities over US peers, a call that has proved correct this year.

The S&P 500 Index has rallied to an all-time peak, powered by technology heavyweights, as benign US consumer price inflation data earlier this week raised wagers of a Fed rate cut in September. Those bets were pared on Thursday as figures showed producer prices remain hot, but swaps traders still see a 92% chance of a reduction.

Futures tracking the S&P 500 were little changed on Friday ahead of key retail sales data and the US-Russia summit in Alaska. The index has gained almost 30% since a low in April.

Investors poured about $21 billion into US equity funds in the week through Aug. 13, after redeeming nearly $28 billion in the week prior, according to the note citing EPFR Global data. Global stock funds attracted over $26 billion and are on track for the third-biggest year of inflows.

Hartnett has recently warned of a potential bubble forming in the equity market. He sees gold, commodities, cryptocurrencies and emerging-market assets as the biggest winners as investors seek protection against inflation and hedge against a weaker dollar.

Written by: Henry Ren @Bloomberg

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