Morgan Stanley’s Mike Wilson says the S&P 500 could drop 9% to 7,100 due to clearing events like the midterm elections, AI spending stress, and liquidity constraints. Despite ongoing Iran war uncertainty, he predicts a rebound to 8,000 after the correction. Wilson notes a historical 100% gain track record in the six to 12 months post-midterms, though 2018 saw a late-year dip. A Democrat-controlled Congress could hinder AI growth via regulation and data center pushback, but Wilson remains bullish long-term. He views current NIMBYism as political theater that fades post-election, paving the way for investment.
Wilson, head US equity strategist since 2017, argues the market is undergoing a stealth correction. He sees the midterms as a temporary headwind, exacerbated by Trump’s vague post-election plans. While AI trade volatility may spill into broader markets, Wilson expects a powerful snapback once uncertainty clears, making dips buying opportunities.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing