The S&P 500’s correction is ‘getting closer to its ending,’ says Morgan Stanley’s Mike Wilson

Group 1 - The S&P 500's correction is nearing its end, with the market showing less complacency compared to previous oil price shocks [1] - The S&P 500's forward price-earnings ratio has compressed by 17% since its 2025 high, which aligns with historical corrections without a recession or Fed-hiking cycle [2] - Approximately 50% of the Russell 3000 index has experienced declines of at least 20% from their 52-week highs [2] Group 2 - The market has already priced in the recent increase in oil prices, with predictions of crude oil reaching $110 per barrel in Q2 before declining to $80 [3] - Earnings growth for the market is accelerating, and the current oil price shift is less dramatic than in previous instances [4] - The likelihood of resuming tanker traffic through the Strait of Hormuz is higher than the risk of a U.S. recession [4] Group 3 - The current oil price movement is more modest compared to past episodes of oil price spikes [5] - There is a significant inverse correlation between interest rates and stock prices, with a correlation coefficient of -0.5, indicating high market sensitivity to rates [5] - The U.S. Treasury market is beginning to factor in a potential rate increase in 2026, although some rate cuts have been included in Morgan Stanley's economic models [5] Group 4 - The U.S. 10-year yield is approaching 4.5%, a level that previously influenced the White House to change its tariff strategy [7]