ME News reports that on October 28 (UTC+8), Morgan Stanley warned that the U.S. stock market may not have completed its current correction. Three factors—pressure on AI financing, the midterm elections, and ongoing tightening of financial conditions—could push the S&P 500 lower over the coming weeks, but the bank still expects markets to rebound before year-end.
Morgan Stanley’s Chief U.S. Equity Strategist, Mike Wilson, stated in his latest client report that the S&P 500 could briefly decline to around 7,100, representing an approximate 8% drop from recent levels—the largest pullback since market turmoil triggered by the Iran war earlier this year.
Despite a cautious short-term outlook, Morgan Stanley maintains its baseline forecast of 8,000 for the S&P 500 by year-end. A rebound to this target from around 7,100 would represent an approximate 12% increase. (Source: ODAILY)
Morgan Stanley Warns of an 8% Decline in U.S. Stocks Before a Year-End Recovery
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Summary
Morgan Stanley warned on October 28 that the U.S. stock market may not have completed its correction, with AI funding pressures, midterm elections, and tighter financial conditions likely to push the S&P 500 lower in the coming weeks. Mike Wilson, the bank’s chief U.S. equity strategist, expects the index to fall to 7,100, an 8% decline from current levels. A rebound to 8,000 by year-end is still anticipated, representing a 12% recovery from 7,100. Traders are also monitoring altcoins amid shifting market sentiment. The Fear & Greed Index reflects growing uncertainty in both traditional and crypto markets.
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