Morgan Stanley Analyst: Will US Stocks Continue to Rise in 2026? Small Caps and Consumer Sector Highlighted

[Crypto World] Michael Wilson from Morgan Stanley recently made a statement, saying that the US stock market will continue to soar into 2026. His logic is pretty interesting: it’s not just the big tech giants leading the rally anymore, the market breadth is expanding, corporate profitability is recovering, and although employment data isn’t exactly booming, it hasn’t collapsed either. All these factors combined create a pretty stable environment.

He’s especially bullish on two sectors—consumer discretionary and small-cap stocks, both of which have recently been upgraded to overweight. His reasoning is straightforward: prices have stopped dropping, demand is picking up, earnings expectations are being revised upward, and interest rates are trending lower. However, Wilson also emphasized that the Fed’s policy moves remain the key variable. It’s also worth noting that, since late October, the earnings trend for the Nasdaq 100 has clearly strengthened.

The core of his outlook is simple: as long as the labor market cools off gradually—like the “boiling frog” effect—rather than experiencing a cliff-like collapse, this stock market rally can hold steady.