ICYMI ('cause I did!) - Morgan Stanley expects the S&P 500 to reach 6,500 by mid-2026.
Morgan Stanley has lifted its forecast for the S&P 500, projecting the index will climb to 6,500 by mid-2026. However, the bank cautions that investors may need to remain patient, as near-term gains are likely to be held back by elevated Treasury yields, persistent inflation, and ongoing uncertainty around U.S. trade policy.
In a note to clients, the firm said it expects market momentum to pick up later this year, supported by
- potential Federal Reserve rate cuts,
- a weaker U.S. dollar,
- and easing regulatory conditions.
Reflecting growing confidence in the global economic backdrop, Morgan Stanley also upgraded U.S. equities to Overweight.
The call comes after a strong first quarter earnings season, which helped fuel a 19% rally in the S&P 500 from its April lows. Still, the bank anticipates slower earnings growth in the quarters ahead, suggesting a more measured path forward for equity markets.
