Looking ahead, Morgan Stanley’s latest forecast is that multiple factors, including improved corporate profit prospects, will drive the S&P 500 to rise by more than 12% in the next 12 months to 7,200 points.
Large technology stocks supported this round of U.S. stock gains. The Financial Times pointed out that Nvidia and Facebook parent company Meta’s stock prices have risen 100% and 50% respectively since their intraday lows in April. Shares of some smaller companies performed even better, with Palantir, a U.S. software and services company, rising 140% since its bottom in April. Shares of cryptocurrency exchange Coinbase soared nearly 180%.
Better-than-expected corporate financial reports also boosted market sentiment. Dow Jones market statistics show that all sectors are up. The health care sector led the way above 3.4%, with raw materials, industry, real estate and communications services rising by more than 2%, finance, energy and consumer discretionary products each rose by more than 1%, and utilities, technology and consumer necessities also rose slightly.
On the other hand, as the United States and Japan and the European Union successively reached trade agreements, the return of risk appetite has also calmed down market sentiment. Wu Zewei, a researcher at the Star Tu Finance Research Institute, said that at present, economies such as the EU, Japan, the UK, Indonesia, and Vietnam have reached an agreement with the United States, and the final results are generally significantly better than expected. Negotiations between the other economies and the United States are being actively promoted, and early consultations have also sent positive signals of smooth progress. The core of market concerns is not the tariff itself, but the uncertainty it brings.
As uncertainty gradually fades, U.S. stock investors’ risk appetite has rebounded significantly. Wu Zewei pointed out that the US stock panic index (VIX) has fallen by 66.83% since April 8 and has fallen back to the level before the new US government took office, indicating that the market has fully digested the impact of the new government policy. Investors who bet on TACO trading have received extremely considerable returns, further encouraging investors to increase their long-term bets on US stocks.
