Lates News

The escalating tensions in the Middle East have increased market concerns about inflation and the timing of a potential interest rate cut by the United States, prompting at least one Wall Street company to become cautious about the prospect of the U.S. stock market reaching historical highs again. Despite the S&P 500 Index rising on Monday due to market expectations that the conflict between Iran and Israel would not escalate into a full-scale war, Morgan Stanley's trading department has abandoned its tactical bullish stance on the U.S. stock market, citing increased risks and the likelihood of a pullback. "Although investors have been strong in buying on dips this year and have profited from ignoring negative news, we believe it is time to reduce risk exposure now," said Andrew Tyler, head of global market intelligence at Morgan Stanley. He accurately predicted the several weeks of stock market gains since April. "From a market position perspective, regardless of how the situation between Israel and Iran unfolds, the market is prepared for a pullback," he told clients on Monday morning.