Morgan Stanley's Wilson Expects Stocks to Rise Into Year-End
Speakers
Mike Wilson
— Chief Investment Officer, Morgan Stanley
Summary
Mike Wilson expects the S&P 500 to rise into year-end as forward earnings keep growing without needing multiple expansion. He sees the recent semiconductor selloff as a near-term rotation driven by historically high and now rolling-over earnings revision breadth in semis. New leadership is emerging in consumer, transportation, and regional banks.
- S&P 500 should continue higher, driven by rising forward earnings.
- Semiconductor earnings revision breadth (70%) is unsustainably high and rolling over.
- The semiconductor trade is unwinding, causing short-term correction and leadership change.
- Rotation favors consumer stocks, transportation stocks, and regional banks.
- The market has been rotating among commodities all year: gold/silver, metals, energy, DRAM/semis.
- Multiples do not need to rise; the market can move higher on earnings alone.
- The correction is a second-derivative deceleration, not a reversal of the earnings uptrend.
Ideas
Semiconductor revision breadth rolling over near-term.
Semiconductor earnings revision breadth has reached an unsustainably high 70%, a level seen only a few times in 25 years; it has started to roll over and the leveraged trade is unwinding, signaling a near-term correction and shift to new leadership.
Forward earnings lift stocks year-end.
Forward earnings (NTM) will continue to rise through next year, supporting the S&P 500 to advance into year-end without needing multiple expansion; the ongoing rotation and near-term revision breadth rollover are corrections, not a change in the uptrend.
Rotate into consumer, transport, regional banks.
As the semiconductor trade unwinds, leadership rotates to consumer stocks, transportation stocks, and regional banks, which held up on a down tape and represent the next area of opportunity.
Up Next
This Bloomberg Markets video, published June 10, 2026, features Mike Wilson discussing SMH, SPY, XLP, IYT, KRE. 3 trade ideas extracted by AI with direction and confidence scoring.