According to Morgan Stanley strategists, US stocks are vulnerable to continued rising energy prices and fluctuations in the bond market. Under this scenario, the S&P 500 index may fall by up to 7%. The team led by Michael Wilson said that although strong corporate profits currently support stock prices to withstand higher bond yields, the S&P 500 valuation has fallen back to its lowest level since March in the past four months. Wilson wrote in the research report that if the financial environment is further tightened or energy prices rise sharply, causing the valuation pullback to worsen in the short term, then the S&P 500 index may drop to 7,100 points before the bull market restarts at the end of the year.

According to Morgan Stanley strategists, US stocks are vulnerable to continued rising energy prices and fluctuations in the bond market. Under this scenario, the S&P 500 index may fall by up to 7%. The team led by Michael Wilson said that although strong corporate profits currently support stock prices to withstand higher bond yields, the S&P 500 valuation has fallen back to its lowest level since March in the past four months. Wilson wrote in the research report that if the financial environment is further tightened or energy prices rise sharply, causing the valuation pullback to worsen in the short term, then the S&P 500 index may drop to 7,100 points before the bull market restarts at the end of the year.