Morgan Stanley warns: US stocks could fall another 8%, and are poised to rebound after three major risks are cleared.
Morgan Stanley’s Chief US Equity Strategist Mike Wilson said in a recent client report that AI financing pressures, the November 3 US midterm elections, and tightening financial conditions could push the S&P 500 index to around 7,100 points in the coming weeks, a roughly 8% drop from current levels. This would mark the largest correction since market volatility sparked by the Iran war earlier this year.
Morgan Stanley’s data shows that since early June, around 60% of Russell 3000 constituents have fallen more than 20% from their peaks, and roughly 96% of semiconductor stocks have dropped over 20%. The bank forecasts the semiconductor sector could fall another 10% to 15% before mid-November.
Credit spreads on data center-related bonds have widened, and CoreWeave’s debt has entered distressed territory this month. The Federal Reserve raised its policy rate to 3.75% to 4.00% in September, driving bond yields higher and tightening financial conditions.
Despite its cautious near-term outlook, Morgan Stanley maintains its year-end S&P 500 target of 8,000 points, with a base 12-month target of 8,300 points. The bank notes that markets typically perform better after midterm elections; data from 1950 to 2022 shows the S&P 500 rises an average of around 8% in the three months following an election.
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Bankless: Zcash's excess development funds spark controversy, four proposals target its block reward allocation mechanism
Bankless published an article discussing the controversy over Zcash’s excess development funding, noting that the funding pool of Zcash’s development grant program has continued to expand, with its current net size estimated at around $125 million, far exceeding current expenditure needs. Zcash co-founder and current Tachyon head Sean Bowe has put forward a draft proposal suggesting the 8% block reward currently allocated to ZCG be terminated in an upcoming network upgrade. Four proposals have emerged in the community regarding the development funding mechanism, covering terminating ZCG allocations, scrapping the entire development fund allocation framework, or phasing out the allocation rate to zero. Supporters argue the current mechanism allows funds to accumulate as ZEC’s price rises, but ZCG is not directly controlled by token holders; opponents, meanwhile, worry that cutting development funding without an alternative could hinder the protocol’s future development and maintenance. All proposals remain under discussion and have not been finalized.
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World Bank forecasts a 23% increase in commodity prices by 2026, with a projected 7% decline next year.
The World Bank said Wednesday that global commodity prices are projected to rise 23% in 2026, driven by factors including surging energy prices, disrupted freight, blocked Black Sea grain shipments amid the Middle East war, and strong demand for safe-haven assets such as gold.
In its latest *Commodity Markets Outlook* report, the bank noted that prices of oil, natural gas, food and metals have all risen sharply this year as global shocks intensify. If the Middle East conflict escalates further and Russia’s oil infrastructure continues to be damaged, the situation could deteriorate.
The report forecasts commodity prices will fall 7% next year. However, if such shocks persist—including the occurrence of the most severe El Ni?o event since 1950—food commodity prices may stay elevated, raising risks of inflation and tighter monetary policy.
The World Bank added that global oil inventories have been continuously depleted amid the Middle East war. It projects global oil supply will drop 5.2% in 2026, the largest decline over the past 40 years excluding the 2020 global recession period.
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AI training environment company Plato announced it has closed a $16 million Series A funding round, with Nava Ventures leading the investment.
AI training environment firm Plato has secured $16 million in Series A funding, led by Nava Ventures, with participation from Gradient Ventures, Transpose Platform, and Microsoft AI CEO Mustafa Suleyman. Freddie Martignetti, founder of Nava Ventures, will join Plato’s board of directors. Following this round, Plato’s total funding has reached $19 million; its prior seed round was led by Gradient Ventures. Founded in 2025 and headquartered in San Francisco, Plato builds resettable, reusable simulated work environments for AI labs, spanning roles including customer support, HR operations, finance, accounting, and healthcare administration. These environments are used for reinforcement learning training and model evaluation, avoiding real-world consequences that would arise from training models on actual systems.
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Anthropic adds Trump-linked "retaliation risks" to its IPO filing, with its AI safety stance emerging as a key focus.
In IPO-related filings, Anthropic warned that its public advocacy for AI safety regulation and statements by its executives could expose the company to risks including pressure from the Trump administration and selective scrutiny. These risks stem from multiple past conflicts between Anthropic and the Trump administration, including disputes over its demands for security limits on the U.S. Department of Defense’s use of its AI technology, as well as disagreements over the safety of its Mythos model and export controls. Anthropic further warned that even if other similarly positioned companies are not treated equally, it could still be a target of specific Trump administration agencies. Future export restrictions, plus cybersecurity or biosecurity incidents triggered by its AI models, could impact its product deployment, international expansion, and business growth. The company also acknowledged that the regulatory measures it advocates, once implemented, could raise compliance costs, restrict product development and launches, and slow its growth. (Bloomberg)
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US stocks opened steadily as investors await the FOMC, with most storage and optical communication stocks rising.
US stock markets open: The Dow Jones Industrial Average opens flat, the S&P 500 rises 0.19%, and the Nasdaq gains 0.28%. For individual stocks, per BIT Stock Platform data, Seagate Technology falls 3.8% after Morgan Stanley cut its price target. Storage and optical communication-related stocks mostly advance: SK Hynix jumps 8.6%, Micron Technology rises 3.8%, AAOI and LITE both gain over 1%, Corning climbs 1.9%, and SNDK increases 5.1%. Crypto-related stocks decline across the board: MSTR drops 1.2%, COIN falls 1.67%, and HOOD declines 4.88%.
7 minutes ago
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