Next Phase of the Market Correction

Mike Wilson, Morgan Stanley's Chief Investment Officer and Chief U.S. Equity Strategist, believes the U.S. stock market correction that began in June has entered its late stage. He suggests the S&P 500 may still have unfinished adjustments, and if the index declines further, the 7100-7200 range will be an important support level. The market still needs to digest three major clearing events: AI-related capital expenditures, uncertainty surrounding the midterm elections, and tightening liquidity. Sentiment has not yet reached the extreme levels of a durable bottom.