Morgan Stanley 2026 Outlook: Moderate rise of the global economy alongside deflation, high levels of uncertainty remain, but US stocks are expected to outperform global markets.

BlockBeats news, on November 17, according to Reuters, Morgan Stanley expects US stocks to outperform global markets in 2026 and is optimistic about the performance of global equities relative to credit bonds and government bonds, with its supporting logic derived from the growth of artificial intelligence-related capital expenditures and improvements in the policy environment. “Driven by micro fundamentals, accelerated AI capital expenditures, and favourable information in policy, risk assets are prepared for strong performance in 2026,” the Wall Street investment bank pointed out in a series of global economic and strategic outlook reports released on Monday. Despite the fluctuating tariff policies of the Trump administration causing ongoing turbulence in global financial markets this year, most trade uncertainties are gradually dissipating as 2026 approaches. The bank forecasts a “moderate” global economic growth alongside deflation in 2026, but emphasizes that “uncertainty remains high, and the outcome range could be extremely divergent,” with the “US being a key variable.” Additionally, Morgan Stanley expects the S&P 500 index to reach 7,800 points by the end of 2026, representing about a 16% upside from current levels, primarily driven by robust corporate earnings growth and AI-driven efficiency improvements. Under the influence of the Fed's dovish policies, small-cap stocks in the US are expected to outperform large-cap stocks, and the cyclical zone is predicted to outperform the defensive zone. The dollar index is expected to drop to 94 in the first half of the year, followed by a rebound to 99 by the end of 2026. The bank also forecasts that gold prices will reach 4,500 USD/ounce in 2026.