Morgan Stanley advises buying US assets except dollar

Strategists at Morgan Stanley have raised their forecasts for US stocks and Treasuries amid expectations of interest rate cuts by the US Federal Reserve (Fed).

The Wall Street bank moved from a neutral stance on US stocks and bonds to a more positive one. According to their forecasts, the S&P 500 index will reach the 6,500 mark by the second quarter of 2026 while the yield on 10-year Treasury bonds will fall to 3.45%.

However, strategists of the organization believe that the dollar will continue to weaken due to the convergence of interest rates and economic growth in the US with the same indicators of other countries.

The last forecast by Morgan Stanley was made against the background of American markets recovery after losses caused by the escalation of global trade tensions in April.

According to Morgan Stanley strategists, in near term, US stocks are not going to reoccur the April losses, and the future US policy program will be more favorable. At the same time, seven rate cuts by the Fed, forecasted by the bank's economists for 2026, will drive stock valuations above the average.