Morgan Stanley’s Mike Wilson Says Market Correction Is in Its Final Innings

Morgan Stanley’s Mike Wilson believes the current stock-market correction is approaching its final stages.
Wilson sees another two to three weeks of potential volatility before a stronger finish to 2026, with positive momentum potentially carrying into 2027.
He also expects the AI trade to begin changing leadership.
Rather than infrastructure providers such as semiconductor, data-center and power companies capturing most of the upside, Wilson expects more attention to shift toward businesses using AI to improve revenue growth, margins and productivity.
That would represent an important transition from spending on AI infrastructure toward monetizing the technology across the broader economy.
Wilson also highlighted widening credit spreads in the AI sector as a bigger risk to equities than rising Treasury yields.
If financing conditions deteriorate, heavily leveraged companies funding aggressive AI expansion could face increasing pressure even if underlying demand remains strong.
At the same time, Wilson says a December Fed rate hike remains a possibility, adding another source of uncertainty for the $SPX.
The thesis is ultimately that near-term volatility may not be finished, but the market could emerge with broader AI leadership and stronger momentum once the correction runs its course.