Morgan Stanley: Funds May Shift from Tech Stocks, US Stock Market Rally Structure Faces Change

Odaily Planet Daily News Morgan Stanley stated that falling oil prices will ease inflationary pressures, driving funds from overvalued tech stocks to undervalued cyclical sectors. The US stock market is shifting from a narrow leadership rally to a healthier broad-based advance. The upward momentum in US equities may no longer be confined to the technology sector but is gradually broadening to include a wider range of cyclical industries. A strategy team led by Michael Wilson pointed out that economically sensitive sectors that underperformed during the Iran conflict could become a major driver in the next phase.

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