Morgan Stanley Predicts Potential Decline in S&P 500 Index

According to Odaily, Morgan Stanley strategists, led by Mike Wilson, have warned investors to brace for a potential 7% to 8% drop in the S&P 500 index unless the White House abandons its tariff plans or the Federal Reserve signals easing measures. In a report to clients on Monday, they identified the next support level for the index at 4700 points, where valuations offer better support, close to the 200-week moving average, a long-term technical trend indicator. Last Thursday, Morgan Stanley had marked 5100 points as a critical level, but updated the support level on Monday due to continued selling pressure indicated by stock futures. S&P 500 futures suggest a decline of over 3%, while Dow Jones Industrial Average futures have plummeted more than 1200 points. The Trump administration showed no signs of backing down in comments made last Sunday, and Federal Reserve Chair Jerome Powell stated last Friday that the economic impact of tariffs remains uncertain, prompting the Fed to adopt a wait-and-see approach.