Morgan Stanley Warns US Stocks Could Fall Another 8%, With a Rebound Expected After Three Major Risks Clear

Odaily: Morgan Stanley warns that the US stock market may not have completed this round of correction. Three factors—AI financing pressures, the midterm elections, and persistently tightening financial conditions—could push the S&P 500 index further down in the coming weeks, though the firm still expects the market to move higher again before year-end.

Mike Wilson, Morgan Stanley's Chief US Equity Strategist, noted in a latest client report that the S&P 500 index could fall to around 7,100 points in the near term, equivalent to a decline of about 8% from recent levels, marking the largest correction since the market turmoil triggered by the Iran war this year.

Despite the more cautious near-term view, Morgan Stanley maintains its base-case forecast of 8,000 points for the S&P 500 by year-end. If the index recovers from around 7,100 points to this target, that would represent a rebound of approximately 12%.