Morgan Stanley CIO Mike Wilson Says One Factor Could Pose Massive Risk to Stocks – And It’s Not the Iran Conflict

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Morgan Stanley CIO Mike Wilson Says One Factor Could Pose Massive Risk to Stocks – And It’s Not the Iran Conflict

Mike Wilson, the head of investment strategy at Morgan Stanley, is cautioning that a specific issue could cause stock prices to fall.

As an analyst, I’m currently most concerned about the rising volatility we’re seeing in the bond market. In a recent interview with CNBC, I shared that this is my biggest worry for stocks right now.

The main concern right now isn’t necessarily interest rates themselves, but rather a potential increase in bond market volatility. This volatility would likely be triggered by external events, like the situation in Iran, and could be compounded by issues in areas like oil and private credit. These factors combined would pose a greater threat to stock prices than simply high interest rates.

Wilson says a rise in bond volatility worries him because it reduces market liquidity.

If the yield on the 10-year Treasury bond rises above 4.50%, that will likely have a greater impact on asset prices than anything else right now.

The yield on the 10-year Treasury bond is currently at 4.39%.

Wilson believes the recent stock market gains, including the S&P 500 reaching a record high in April even with global uncertainties, are primarily due to companies reporting strong profits.

The company’s earnings growth has been surprisingly strong, and many haven’t fully recognized it.

Let me give you an example: the typical company within the Russell 3000 – that’s around the 1500th largest in the market – is currently seeing earnings grow by almost 14% compared to last year. I believe this positive trend across more companies isn’t getting enough attention.

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2026-05-01 12:23