Morgan Stanley’s Wilson Sees US Stock Pullback Coming to an End

^GSPC +0.54% ^SPX +0.60%

(Bloomberg) -- US stock markets are likely nearing the end of the recent selloff, according to Morgan Stanley strategist Michael Wilson, who reiterated his bullish outlook for next year.

The banks views “any further weakness in the short-term as an opportunity to add long exposure into next year,” according to a note on Monday. The team is bullish on consumer discretionary, healthcare, financials, industrial and small-cap stocks.

Most Read from Bloomberg

• India’s Richest Family Powers Push for Green Space in Mumbai

• San Francisco Hotels That Echoed City’s Decline Sell for 75% Off

• Where Train Dreams Meet Reality in Texas

• Despite Star Architect’s Alleged Misconduct, New Harlem and Princeton Museums Shine

• High-Rises Are Changing the Slovak Capital of Bratislava Beyond Recognition

The strategists expect the S&P 500 to rally to 7,800 a year from now, making it among the highest predictions among other Wall Street firms tracked by Bloomberg. The forecast implies about an 18% rally from current levels and a sharp rebound from the current pullback.

The S&P 500 Index has lost about 4% from its October highs amid concerns over rich technology valuations. “The weakness under the hood is a sign that we’re closer to the end of this correction, than the beginning,” Wilson wrote, adding that further volatility can’t be ruled out in the short term.

Wilson said the Federal Reserve will eventually deliver interest rates cuts that will prop up the stock market, and sees artificial intelligence driving efficiency gains.

He’s among the rare forecasters who held on to his bullish view in April, even as stocks sank in the aftermath of sweeping US tariffs. The conviction proved correct, with the S&P 500 rebounding to a record in the following months.

Most Read from Bloomberg Businessweek

• Permabull Tom Lee Sees Bitcoin as High as $200,000 by January’s End

• The Dirty Secret of Biodegradable Plastic

• The AI Industry Is Built on a Big Unproven Assumption

• Weed Drinks That Get You Very, Very High Could Be Gone Soon

• Cutting Ties With China Is Harder Than Companies Expected

©2025 Bloomberg L.P.