One of Wall Street's top strategists is reining in her summer rally forecast.
Ally Invest's Lindsey Bell cites the spike in coronavirus cases across the country as the main catalyst behind her decision.
"In the last couple of weeks, especially the last seven days, you've see a significant jump in virus cases," the firm's chief investment strategist told CNBC's "Trading Nation" on Thursday. "You're also starting to hear about a slowing and a reversal of reopening plans we didn't have before Monday."
Besides places such as California shuttering its gyms, salons and restaurants again due to the virus spike, Bell is concerned about underlying market signals. She lists the 10-year Treasury Note yield's trouble getting above 1%, gold recently trading above $1,800 an ounce and elevated volatility levels as troublesome factors.
"Those are things that are making me become more vigilant," she said.
Bell, a CNBC contributor, believes the setback could upset the economic rebound and create a sideways market embedded by headline-driven volatility.
"June economic data has improved," she said. "The question though is where does that economic data go from here? Are we plateauing or could we potentially see a slowdown and not grow?"
She suggests the market is at a critical crossroad — particularly as the presidential election begins to dominate the headlines.
"There's speculation that it could be a complete Democratic sweep, and obviously that is going to have implications on the marketplace," said Bell. "Our political team here at Ally, they always remind me while November seems close, it's far enough away to think about how quickly the coronavirus pandemic happened. Anything could happen between now and then."
In the meantime, Bell acknowledges there are some positives in the market including the Federal Reserve's unrelenting policy support for stocks and a high probability the government will pass a new stimulus package to help struggling Americans.
She's telling long-term investors to have a barbell approach as a hedge.
"It's best to be prepared for any situation that could occur in November, and I think that level of uncertainty is going to continue to feed the volatility," Bell said. "Our expectation is it's possible that volatility could remain elevated over the next month to a couple of months as hopes for clarity fade."