Global Markets Rally on SpaceX Earnings as Morgan Stanley Eyes S&P 500 Gains
Global markets rallied after SpaceX reported a 161% revenue surge and strong tech earnings. Morgan Stanley strategist Mike Wilson predicts the S&P 500 could reach 8,500 points by mid-2027.
Global markets received a boost overnight as SpaceX crushed third-quarter expectations, with revenues surging by 161% and significantly improving sentiment toward AI stocks. Additionally, a stronger-than-expected forecast from Super Micro Computer alleviated investor concerns regarding companies' ability to sustain the scale of investments in artificial intelligence infrastructure.
Asian Markets and Wall Street Futures
Asian markets responded positively, alongside Wall Street futures. Overnight brought another test with the publication of earnings reports from Tesla and Meta. In Asia, South Korea's Kospi index jumped 4.3%, recovering from yesterday's declines, driven by a surge in semiconductor manufacturer stocks. Japan's Nikkei 225 index rose 1.6%, Hong Kong's Hang Seng traded relatively stable, and trading in mainland China opened unchanged.
Wall Street futures pointed to a positive trend this morning. The Dow Jones rose 0.1%, the S&P 500 gained 0.3%, and the Nasdaq climbed 1%. Yesterday afternoon, Wall Street opened lower but staged a sharp turnaround as investors brushed aside concerns over massive AI investments. By the closing bell, the Nasdaq index finished unchanged, the Dow Jones rose approximately 0.9%, and the S&P 500 added 0.2%.
Tel Aviv Stock Exchange and Analyst Insights
Dual-listed stocks weighed on the opening of trading in Tel Aviv, led by Tower Semiconductor, which returned with a negative arbitrage gap of roughly 5%. Other dual-listed stocks expected to decline at the open include Teva, Elbit Systems, NICE Systems, and ICL. Yesterday, the Tel Aviv Stock Exchange closed on a positive note. The TA-35 index edged up 0.2% under the weight of technology stocks, whereas the TA-90 index demonstrated strength, surging 1.4%.
Mike Wilson, chief US equity strategist at Morgan Stanley, estimates that the correction in the average American stock is nearing its end and that the S&P 500 index could climb to 8,500 points by mid-2027.
"I think we're in the final innings of this," Wilson said yesterday (Tuesday) in an interview with CNBC, though he added that he expects another two to three weeks of volatility before a stronger finish to 2026. The target implies an upside potential of approximately 10.5% from Monday's close of 7,690.73 points, exceeding the bank's official mid-2027 target of 8,300 points.
Although the S&P 500 has risen by more than 12% this year, the underlying picture is vastly different. According to Wilson, more than half of the stocks in the Russell 3000 index have dropped at least 20% from their peaks since June.
