Morgan Stanley maintains S&P 500 target at 6500 despite economic slowdown forecast

Published 14/07/2025, 21:16
Morgan Stanley maintains S&P 500 target at 6500 despite economic slowdown forecast

Investing.com - Morgan Stanley (NYSE:MS) is maintaining its S&P 500 target at 6500, representing approximately 3% upside from current levels around 6308, despite forecasting a substantial economic slowdown in the second half of 2024.

The investment bank expects inflation to increase in the coming months as tariff costs begin affecting consumer prices, with a typical lag of 3-4 months from tariff implementation to CPI impact, though first-quarter front-loading of imports could complicate this pattern. InvestingPro data reveals that despite inflation concerns, high-yield bonds maintain strong fundamentals, with HYG showing a solid 4.71% year-to-date return and maintaining dividend payments for 19 consecutive years.

Morgan Stanley anticipates the U.S. economy will slow later this year as the effects of tariffs and immigration restrictions materialize, noting the recent nonfarm payrolls report indicated cooling but not collapsing labor market conditions, with immigration restrictions slowing labor supply growth.

The firm projects these economic factors will keep the Federal Reserve on hold longer than market expectations, while acknowledging a disconnect between its economic outlook and equity market resilience.

Morgan Stanley’s 6500 S&P target is based on expected earnings of approximately $300 per share—representing about 10% growth—and a price-to-earnings multiple of 21.5x, though the bank warns investors should prepare for increased market volatility later this summer.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.