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As investors forget ‘buy the dip’ and ‘buy the invasion’ instead, BofA warns we’re still close to a bear market

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Russia’s military operations in Ukraine have some traders “buying the invasion,” but a Friday note from Bank of America Research says investors should beware the bear. Bear market, that is.

Prices whipsawed in both the equities and crypto markets on Thursday as the Russian military invaded Ukraine, plunging before making a dramatic recovery.

The tech-heavy Nasdaq experienced its biggest ever one day point gain Thursday, after starting the day at 12,588–a 3.4% drop from the previous day’s close. The S&P 500, a bellwether for the U.S. stock market, also closed up 1.5% Thursday, erasing a more than 2.6% loss earlier in the day.

Crypto also experienced a tremendous reversal. After dropping to a low of $34,700 around 12 a.m. ET on Thursday, Bitcoin, the most popular cryptocurrency, finished the day at nearly $39,000–a 12% increase. Ether, the second-largest crypto, also saw its price swing about 12% from a low of $2,336 around 12 a.m. ET to $2,622 by the end of the day.

While gains in stocks and crypto show investors are piling in, sort of a mega-version of “buying the dip,” a Friday note by Bank of America Research said investors should be careful.

In the Nasdaq, which contains some of the biggest American companies, such as Apple, Microsoft, and Amazon, 76% of companies entered bear market territory, according to The Flow Show, a note written by chief investment strategist Michael Hartnett. In the S&P 500, 50% of companies were trading 20% lower than their 52-week highs.

The Russian bear invading Ukraine had Hartnett’s team singing the bear-market blues.

Nearing the end is the “bull era of central bank excess, Wall Street inflation, and globalization,” according to the note. From now on, there will be a “bear era of government intervention, social & political polarization, Main St inflation & geopolitical isolationism,” the note read.

Russia’s invasion of Ukraine will cause higher inflation, which will force the Federal Reserve to increase the interest rates at which banks can borrow and lend to each other, according to the report. The Russian invasion increases the risk of stagflation–last seen in the 1970s–when inflation remains high while economic growth and unemployment are also high. It’s all accumulating to really screw up the world’s economy, as Fortune previously reported.

On Friday afternoon, the Nasdaq was at 13,607, up 133 points or nearly 1%.The S&P 500 was up 1.72% at 4,362.

This story was originally featured on Fortune.com

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