Core Viewpoint - The U.S. stock market is experiencing a significant rally, with the S&P 500 index rising nearly 24% since mid-April, prompting discussions about the sustainability of this bull market [1] Group 1: Corporate Earnings Improvement - The primary driver for the continued rise in U.S. stocks is the improvement in corporate earnings, with recent upward revisions in earnings forecasts for S&P 500 constituents [3] - The breadth of earnings improvement is expanding beyond just technology giants, as indicated by the ERB indicator, which has rebounded from -25% in mid-April to -5% currently [3] - Historical data suggests that such turning points often signal a strong return outlook for the market, with large-cap quality stocks benefiting first, followed by small-cap and lower-quality stocks [3] Group 2: Federal Reserve Monetary Policy Expectations - A shift in expectations regarding Federal Reserve monetary policy is the second catalyst supporting the rise in U.S. stocks, with predictions of up to seven interest rate cuts by 2026 [4] - The market tends to react proactively to anticipated changes in monetary policy rather than waiting for explicit signals [4] - While there are risks associated with rising unemployment potentially disrupting market optimism, this scenario is not included in Morgan Stanley's baseline forecast [4] Group 3: Market Resilience to External Shocks - The strong resilience of the U.S. stock market in absorbing external shocks is the third pillar supporting its future performance, mirroring historical trends following geopolitical conflicts [5] - The easing tensions between Iran and Israel and the subsequent decline in international oil prices have reduced energy cost threats to the economic cycle [5] - The potential removal of "retaliatory tariffs" from tax reform legislation is expected to boost market confidence, alongside a decrease in the yield premium on U.S. Treasuries, indicating alleviated concerns about U.S. fiscal health [5] - Morgan Stanley maintains a target of 6,500 points for the S&P 500 index over the next 12 months, provided that the 10-year Treasury yield remains below 4.5% [5]

Core Viewpoint - The White House Press Secretary Leavitt described the recent rise in the U.S. stock market as a positive indicator of economic strength and investor confidence [1] Group 1 - The U.S. stock market has experienced significant gains, reflecting a robust economic environment [1] - Investor sentiment appears to be improving, contributing to the upward trend in stock prices [1] - The administration views the stock market performance as a sign of effective economic policies [1]

Market Performance - On June 10, US stock indices all rose, with the Dow Jones Industrial Average reaching a three-month high during intraday trading [2][3] - The Dow Jones Industrial Average closed up 0.25% at 42,866.87 points, the S&P 500 rose 0.55% to 6,038.81 points, and the Nasdaq Composite increased by 0.63% to 19,714.99 points [2][3] Sector Performance - In the banking sector, major stocks showed mixed results, with JPMorgan rising 0.73%, Bank of America up 0.55%, and Goldman Sachs increasing by 0.25%, while Citigroup fell 0.17% and Morgan Stanley dropped 0.05% [3] - The energy sector saw most major stocks rise, with Schlumberger up over 4%, ConocoPhillips increasing by over 3%, and ExxonMobil and Occidental Petroleum both rising over 2% [4] - Airline stocks had mixed performance, with Southwest Airlines up over 2% and Delta Airlines rising 1%, while United Airlines fell 0.32% [5] Technology Sector - The semiconductor industry saw a broad increase, with the Philadelphia Semiconductor Index rising 2.06% and Intel increasing by over 7% [5] - Tesla's stock rose over 5%, bringing its market capitalization back above $1 trillion, reaching $1.05 trillion [5] Chinese Stocks - Chinese stocks listed in the US showed a slight increase, with the Nasdaq Golden Dragon China Index rising 0.3% [6] - Notable gainers included Yatsen Holding up over 15% and Legend Biotech rising over 8% [6] Commodity Prices - International gold prices and oil prices experienced narrow fluctuations after previous volatility [7] - On June 10, London gold prices slightly decreased but remained above $3,300 per ounce, while NYMEX WTI crude oil futures also saw a minor decline of less than 1% [8][9]