Morgan Stanley shares rose 2.34% to $179.96 on Friday, halting a three-day losing streak as the Dow Jones Industrial Average surpassed the 50,000 milestone. Trading volume reached approximately 9.1 million shares. The rebound followed a 2.35% drop on Thursday and occurred against a backdrop of shifting investor sentiment regarding Federal Reserve rate cuts and escalating corporate investment in artificial intelligence.
Broader Market Momentum
The Dow's historic close above 50,000 was propelled by a rally in semiconductor stocks, with investors interpreting rising AI infrastructure budgets as a sign of sustained economic momentum rather than a warning signal. "There's enough evidence that there's real demand for AI products," noted Ross Mayfield, an investment strategy analyst at Baird.
Despite Friday's advance, Morgan Stanley underperformed several major banking peers. JPMorgan climbed 3.95%, Wells Fargo increased 2.63%, and Charles Schwab added 3.02%. Morgan Stanley remains 6.6% below its 52-week high of $192.68, reached on January 16.
Analyst Sentiment and Economic Data
Analyst outlook has softened recently. Evercore ISI downgraded Morgan Stanley from "strong-buy" to "hold" on Thursday. Meanwhile, Federal Reserve commentary remains in focus. San Francisco Fed President Mary Daly described the labor market as "precarious" and indicated a leaning toward additional rate cuts.
Economic data provided a mixed picture. The University of Michigan's consumer sentiment index rose to 57.3 in early February, a six-month high, even as concerns about employment and living costs persisted.
Risks and Upcoming Catalysts
Significant risks persist. Major U.S. technology firms are projected to spend over $630 billion on AI this year. Morgan Stanley analysts observed growing investor impatience with heavy capital expenditures that lack immediate, visible returns—a pressure point that could quickly impact bank trading desks and deal activity if market volatility increases.
The coming week brings key economic releases. The Labor Department will publish the January jobs report on February 11, followed by the January Consumer Price Index on February 13. Morgan Stanley is scheduled to pay a quarterly dividend of $1.00 per share on February 13.
