What Happened?
Shares of global financial services firm Morgan Stanley (NYSE: MS) jumped 3.1% in the afternoon session after comments from Federal Reserve Chair Jerome Powell indicated that interest rate cuts could be on the horizon, sparking a broad market rally. The broader market rallied after Federal Reserve Chair Jerome Powell stated that a slowing job market and shifting risks to the economy "may warrant adjusting our policy stance." This dovish signal was interpreted by investors as a clear indication that the central bank is prepared to lower interest rates, a move that typically stimulates economic activity. Financial stocks were among the day's biggest winners, with the banking sector heading for a record high. Lower interest rates can be beneficial for banks like Morgan Stanley by potentially boosting lending, increasing deal-making in their investment banking divisions, and improving the value of their fixed-income assets.
After the initial pop the shares cooled down to $147.89, up 2.7% from previous close.
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What Is The Market Telling Us
Morgan Stanley’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Morgan Stanley is up 18.5% since the beginning of the year, and at $147.89 per share, it is trading close to its 52-week high of $148.51 from August 2025. Investors who bought $1,000 worth of Morgan Stanley’s shares 5 years ago would now be looking at an investment worth $2,824.
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