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Stocks could endure a manageable hiccup in the third quarter of the year, according to Mike Wilson, Morgan Stanley’s chief US equity strategist.
Wilson tells Bloomberg Television in a new interview that Q3 could witness the moderate impact of tariffs.
“We’ve been saying, the third quarter is probably the quarter of risk, where you’ll see some of this flow through to the cost of goods sold. I don’t think this is a massive correction. It’s a 5-7% correction.
For some companies, it could be bigger, but this is the quarter of risk where the tariffs will start to hit, but the markets are already thinking about this as a temporary impact. And ’26 now, on an earnings growth standpoint, is looking better.”
Wilson says he’s hoping the market pulls back for buy opportunities in an otherwise-promising market.
“This is what the beginning of a new bull market looks like, right? It’s just explosive. It doesn’t let people in. The rate of change is accelerating beyond what you expected. I think the pullback’s going to be short and shallow, maybe there will be another surprise, another test of some kind, that will cause something more severe. But I really can’t see more than a 5 or 10% correction given what I see now in the landscape.”
