Morgan Stanley Flags Major Turning Point for Stock Market

What happened

Morgan Stanley says the U.S. stock-market selloff that began in June may be close to ending. Chief U.S. equity strategist Mike Wilson said about 60% of Russell 3000 stocks have fallen at least 20% since June, while the S&P 500 held up better.

Confirmed

Global impact / market context

Wilson believes the S&P 500 could still fall toward 7,100 to 7,200 as big stocks catch up with broader weakness. He sees that as a possible final stage of the correction, after which the November 3 midterm elections could remove near-term uncertainty.

Analyst inference

Morgan Stanley's historical work shows U.S. large-cap stocks gained about 15% on average in the six months after midterm elections since 1982. That is historical data, not a forecast, but Wilson argues clarity on congressional control could lift stocks.

Analyst inference

What to watch

1. Morgan Stanley still sees important risks. Wilson said concerns around AI spending are increasingly shifting toward free cash flow and financing capacity, which means whether companies can fund large infrastructure programs without straining balance sheets. Confirmed
2. Watch whether the S&P 500 falls toward Wilson's 7,100 to 7,200 range as mega-cap stocks catch up with weakness already seen across the broader Russell 3000 market. Proposed
3. Watch whether the November 3 midterm elections bring clarity on congressional control, which Wilson argues could remove an important market overhang and act as a catalyst for stocks. Analyst inference

Evidence

• gurufocus.com