Morgan Stanley warns: summer stock-market rebound faces risks; probability of Fed rate hikes is 82%

Morgan Stanley said last week that even though July is typically one of the market’s strongest months, there may be three emerging risks that could stall the summer rally in the US stock market. Andrew Sheets, global head of fixed income research at the firm, said concerns include the possibility that the Iran conflict could escalate again after a ceasefire agreement falls apart; the Federal Reserve may continue raising rates to combat inflation; and that artificial intelligence capital spending by tech giants could slow down.

Market data shows that after a strong rise in the second quarter, the Nasdaq 100 index has seen sharp fluctuations in recent weeks, with trading in chip and memory stocks especially volatile. The Fed Watch tool shows that the probability of at least one more rate hike by the end of this year is 82%. At the same time, Morgan Stanley’s baseline scenario forecasts that AI investment will grow from about $800 billion in 2026 to $1.2 trillion in 2027.

Second-quarter earnings may show that major tech companies are becoming more cautious about AI spending; given that market expectations are highly dependent on continued AI investment momentum, this poses a major risk. #GateUS合规扩展佛罗里达