Banking giant Morgan Stanley believes the S&P 500 is in the early stages of a new bull market that could last for multiple years.
In a new CNBC interview, Morgan Stanley CIO Mike Wilson says the most recent bear market landed in April of this year, when the S&P 500 dropped to a 2025 low of 4,835 points.
According to Wilson, the recovery following the correction marks the beginning of a multi-year bull market.
“We said very clearly that April was the end of a bear market. Liberation Week was the final piece of bad news you typically get at the end of a major bear market. And by the way, just to be clear, the average stock was down 35% between April of 24 and April of 25. That’s a proper bear market. So the new bull market began in April.
And now it’s evolving. And the stock market’s ahead of the data, as it typically is. By the way, just because small caps and low-quality early-cycle stocks haven’t outperformed, they have gone up in absolute terms significantly. So the market is telling us that that thesis is correct for now. And the risk of that is that the Fed stays behind the curve longer than the market expects.
And we have a little digestion here, which could be a meaningful correction in the next six weeks. We’ll see how it goes. But either way, that doesn’t change our thesis, that the early cycle rolling recovery has begun.”
Morgan Stanley’s equity bull market call comes as Goldman Sachs unveils a two-pronged strategy amid the massive capital spending in AI. Peter Oppenheimer, chief global equity strategist at Goldman Sachs Research, says investors can take a “barbell” approach, with investments in fast-growing tech stocks and in companies that would facilitate the AI infrastructure buildout.
“For AI to fulfill its potential, we need a rapid and meaningful upgrade to physical infrastructure. Coupled with a trend of increased defense spending, decarbonization, and electrification, we are seeing a new super cycle of capex spend.”
As of Friday’s close, the S&P 500 is trading at 6,643.
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