Morgan Stanley: Funds May Shift from Tech Stocks, US Stock Market Rally Faces Structural Changes

Odaily reports that Morgan Stanley suggests falling oil prices will ease inflationary pressures, driving capital flows from high-valuation tech stocks to undervalued cyclical industries. The US stock market is transitioning from a "single-stock rally" to a healthier broad-based advance. The upward momentum in US equities may no longer be confined to the tech sector, but could gradually spread to a wider range of cyclical industries. The strategy team led by Michael Wilson points out that economically sensitive sectors that underperformed during the Iran conflict could become a major driving force in the next phase.

Amid expectations of a long-term agreement between the US and Iran, risk appetite has recently rebounded significantly. The S&P 500 is now only about 2% away from its all-time high. The market generally expects that, against a backdrop of stabilizing geopolitical conditions, global stock markets may usher in a new round of gains. European markets, with their higher proportion of cyclical industries, are considered to have a relative advantage. (Jin Shi)