Morgan Stanley 2026 Outlook: Global Economy to See Moderate Growth and Disinflation, Uncertainty Remains High, but U.S. Stocks Expected to Outperform Global Markets

BlockBeats News, November 17, according to Reuters, Morgan Stanley expects that US stocks will outperform global markets in 2026, and is optimistic about the performance of global equities relative to credit and government bonds. Their supporting logic comes from the growth in capital expenditures related to artificial intelligence and improvements in the policy environment.

"With the combined boost from micro fundamentals, accelerated AI capital expenditure, and favorable policies, risk assets are prepared for a strong performance in 2026," the Wall Street investment bank stated in a series of global economic and strategic outlook reports released on Monday. Although the Trump administration's fluctuating tariff policies have caused continued volatility in global financial markets this year, most trade uncertainties are gradually dissipating as 2026 approaches.

The bank forecasts that 2026 will see "moderate" global economic growth alongside disinflation, but emphasizes that "uncertainty remains high, and the range of outcomes could be extremely divergent," with "the US being the key variable."

In addition, Morgan Stanley expects the S&P 500 index to reach 7,800 points by the end of 2026, representing about 16% upside from current levels, mainly driven by solid corporate earnings growth and AI-driven efficiency improvements. Under the influence of dovish Federal Reserve policies, US small-cap stocks will outperform large-cap stocks, and cyclical sectors will outperform defensive sectors. The US Dollar Index is expected to fall to 94 in the first half of the year, then rebound to 99 by the end of 2026.

The bank also predicts that the price of gold will reach $4,500 per ounce in 2026.