Citi Flags Highest Stock Bubble Risk Since 2008, Warns Against Blind Dip-Buying

Citigroup said on June 5, 2026, that global equities are showing the highest risk of a bubble since the 2008 financial crisis, with its proprietary Bear Market Checklist now flashing 10 out of 18 warning signals. The bank cautioned investors not to blindly buy the dip if conditions worsen. Analyst Beata Manthey noted this is the highest reading since the global financial crisis. Historically, once the checklist enters double digits, risk signals tend to accelerate. U.S. stocks carry the most extreme risk at a reading of 11.5, while European markets remain subdued with only five signals triggered. Factors driving elevated risk include stretched valuations, increasingly optimistic investor sentiment, surging AI-related capital expenditure, and a pickup in IPOs and equity issuance. Despite these concerns, tight credit spreads provide some structural support. Citi maintains a constructive outlook for year-end but stressed that if warning lights continue to multiply, any pullback should not be met with automatic dip-buying. The current 10 signals remain below the 17.5 seen before the 2000 dot-com peak and 13 ahead of the 2008 crisis.