(Bloomberg) — This summer’s surprise Treasury rally has bonds beating everything from small-cap stocks to commodities — a worrisome signal to Bank of America’s technicals team.

The ratio of U.S. bond futures versus the Russell 2000 has ticked higher since March’s all-time low as the crumbling reflation trade weighs on small caps. It’s a similar story in commodities: After underperforming copper and crude oil over the past few months, bonds are fighting back.

When such ratios have bottomed in the past, it typically signals that there’s more bond gains in the offing — which could dent risk appetite through year-end, according to Bank of America. The warning comes as virus cases rise and vaccine efficacy against the delta variant comes into question, combined with uncertainty on when the Federal Reserve will start to reduce its bond purchases.

“This cross asset conundrum casts a shadow over risk taking in 2H21,” Bank of America strategists Paul Ciana, Adarsh Sinha and Janice Xue wrote in a report Tuesday. “Rising ratios suggest a rotation into safety and/or rebalancing trend that can continue while supports remain or top form.”

Rates on 10-year Treasuries have dropped nearly 50 basis points since peaking at 1.77% in late March, weighed down by haven flows despite a series of hotter-than-anticipated inflation reports. That slide in yields helped large-cap tech stocks reassert their dominance, with the Nasdaq 100 higher by more than 19% in 2021 versus the Russell 1000’s almost 12% gain.

While Wall Street broadly expects yields to rise by year-end, haven flows amid building uncertainty have put a cap on any meaningful climb. Benchmark 10-year Treasury rates edged higher Tuesday to about 1.29% — firmly within the past month’s range.

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