Morgan Stanley warns the S&P 500 could drop 9% Nauman Khan Mon, November 2, 2026 at 6:12 AM EST 1 min read MS -2.41% ^GSPC -1.82% Trade MS on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Morgan Stanley's chief U.S. equity strategist, Mike Wilson, expects another temporary pullback that could take the S&P 500 about 9% below its record, to 7,100, before a rebound to 8,000, according to a Sunday Bloomberg News interview.
He cited political uncertainty, concerns over artificial intelligence spending and tighter liquidity. Wilson said a correction beneath the surface has been underway for months.
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A broader recovery may follow the November midterm elections, he said. Morgan Stanley research shows U.S. stocks rose in the six- and 12-month periods after every midterm since 1950, though the war in Iran and uncertain government policies could complicate that pattern.
Political opposition to data-center construction and added regulation could limit AI infrastructure growth, Wilson said. Some of that resistance might fade after the elections.
He voiced limited concern about the surge in stock and debt sales funding AI investment and mergers, saying strong economic growth is absorbing the capital.
Higher borrowing costs hit weaker companies hardest, which supports a preference for higher-quality firms, he said. Wilson expects capital-raising pressure to ease over the coming month.
