Morgan Stanley: S&P 500 May Have Hit Capitulation Low
Morgan Stanley believes the U.S. stock market could be stabilizing after a sharp correction earlier this month. The investment bank’s chief U.S. equity strategist and CIO, Mike Wilson, says the worst of the downturn may be behind us.
In a new interview with CNBC, Wilson described April 7th as a “capitulation day,” marking a potential low for the current correction. Capitulation is a term used in financial markets to describe the moment when investors, overwhelmed by fear and losses, exit positions en masse — often indicating a bottom.
“I think we’ve seen the worst of the momentum,” Wilson said. “We’ve probably made the momentum low, the capitulatory low for this correction… The patient had a heart attack. Now the patient has to recover.”
S&P 500 Enters Recovery Range
After plunging to a new 2025 low of 4,835 points, the S&P 500 quickly rebounded with a 1,000-point rally over just two days. Morgan Stanley believes this places the index in a new trading range — between 4,850 and 4,900 — as markets search for direction amid macroeconomic uncertainty.
Wilson said the market is now in a phase of testing support and resistance levels. While short-term volatility is expected, the strategist doesn’t foresee a major move higher until investors gain clarity on economic conditions.
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Recession Fears Still Loom
According to Wilson, recent market action reflects growing concerns over a potential economic downturn. “That was the moment of recognition that, ‘Hey, we may be going over the edge here on the recession,’ and we priced a lot,” he said.
Until the depth of the economic slowdown and the outlook for recovery become clearer, Wilson expects the S&P 500 to remain volatile. Investors will be watching for further signals from economic data, corporate earnings, and central bank policy to determine whether the market has truly bottomed.
Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work at Coindoo has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP. Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem. To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem. His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.
