Morgan Stanley chief cross-asset strategist Serena Tang says the firm remains bullish on risk assets for the rest of 2026, citing resilient US growth and a massive AI-driven investment cycle.
Tang notes Morgan Stanley's S&P 500 target for mid-2027 is 8,300, supported by expected earnings growth of 23% in 2026 and 12% in 2027. The momentum, she says, is coming from improving earnings.
AI-related spending in data centers, chips, power systems and networks remains a dominant market force, though the boom could pressure credit markets as companies issue more debt to finance expansion.
Morgan Stanley recommends a risk-on tilt: overweight equities, underweight core fixed income, with benchmark weights for other fixed income, commodities and cash. The U.S. is favored over Europe and Japan, which face energy and macro risks.