Morgan Stanley analysts are reportedly predicting that US stocks will hit a massive all-time high by the middle of next year. The brokerage firm says that the S&P 500 may decline in the third quarter of this year, but ultimately reach 7,200 points by mid-2026, a more than 13% increase from its current level, reports Reuters. Morgan Stanley chief investment officer Mike Wilson cites bullish market momentum driven by strong earnings as well as expected Fed rate cuts as the main catalysts for the new stock highs. Says Wilson, “With earnings on solid footing into next year and the Fed closer to cutting rates, valuations can remain supported around current levels (~22x) as we think about the 12-month outlook.” However, Morgan Stanley warns that rising Treasury yields, particularly if the 10-year note exceeds 4.5%, may result in an underperformance of some stocks, like small-cap equities, which are more sensitive to rates. The brokerage also says it expects a rise in costs and inflation to materialize later this year as a result of President Trump’s tariffs, which could impact firms’ profit margins. Lastly, Morgan Stanley says the stock market may dip temporarily from mid-July to August as a result of seasonal trends. Still, the brokerage firm says stock market dips in the third quarter are likely buying opportunities, predicting declines and consolidations will be temporary. As of Wednesday’s close, the S&P 500 is trading at 6,358 points. Follow us on X , Facebook and Telegram Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox Check Price Action Surf The Daily Hodl Mix Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing. Generated Image: Midjourney The post Morgan Stanley Predicts S&P 500 Index Will Hit Massive New All-Time High by Mid-2026 – But There’s a Catch: Report appeared first on The Daily Hodl .
