Morgan Stanley: Expects a bull market in US stocks in 2026

According to Mars Finance, on December 8th, Morgan Stanley analyst Michael Wilson stated that the US stock market is poised for a bull market in 2026, with a wider range of leading sectors, improving corporate earnings, and only mild weakness in the labor market. He expects the consumer discretionary sector and small-cap stocks (both recently upgraded to overweight) to continue outperforming the broader market, primarily due to stabilizing prices, stronger commodity demand, upward revisions to earnings expectations, and lower interest rates. Wilson believes the Federal Reserve remains a key driver, but he also points out that the Nasdaq 100's earnings trend has strengthened since late October. He believes the stock market will find a supportive environment against the backdrop of a gradual rather than sharp weakening labor market. (Bloomberg)