Morgan Stanley Warns of Potential 8% Drop in US Stocks, Rebound Expected After Three Major Risks Clear] Odaily Planet Daily reports that Morgan Stanley warns the US stock market may not yet have completed its current correction. Three factors—AI funding pressures, the midterm elections, and continued tightening financial conditions—could push the S&P 500 further down in the coming weeks, but the bank still expects the market to rebound by the end of the year. In a recent client report, Morgan Stanley's chief US equity strategist, Mike Wilson, noted that the S&P 500 could fall to around 7100 points in the short term, equivalent to a drop of about 8% from recent levels, marking the largest correction since the market turmoil triggered by the Iran war this year. Despite a more cautious short-term outlook, Morgan Stanley maintains its base case forecast of 8000 points for the S&P 500 by the end of the year. A rebound from around 7100 points to this target would represent a rise of approximately 12%.