Some of Wall Street’s biggest names are bracing clients for turbulence ahead. Strategists at Morgan Stanley, Deutsche Bank, and Evercore are cautioning that US equities, particularly the S&P 500, look vulnerable to a near-term slide after a blistering rally since April pushed valuations to overheated levels, Bloomberg reports.

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How steep are we talking? Morgan Stanley forecasts a correction of up to 10% this quarter, citing the drag from tariffs on consumers and corporate margins. Evercore sees the potential for an even steeper 15% drop, while Deutsche Bank’s Parag Thatte argues that equities are overdue for at least a modest pullback after more than three months of gains.

The warnings come as US economic data turns shaky: US inflation is ticking higher, job growth is softening, and consumer spending is losing steam. Seasonality is also working against stocks, with August and September historically (for the past 30 years to be specific) the weakest months for the S&P 500, averaging losses of 0.7% each versus a 1.1% monthly gain on average, according to data compiled by Bloomberg.

Buy the dip? Evercore and Deutsche Bank advised investors to stay the course and use any weakness as a buying window, particularly in sectors benefitting from the ongoing AI boom, noting that the long-term bull-cycle remains intact.

MARKETS THIS MORNING-

Asian markets are showing mixed performance this morning, with Japan’s Nikkei and the Shanghai Composite both in the green, up 0.6% and 0.1%, respectively, and the Hang Seng and Kospi in the red.

TASI

10,922

+0.8% (YTD: -9.3%)

MSCI Tadawul 30

1,408

+0.8% (YTD: -6.7%)

NomuC

26,853

-0.1% (YTD: -14.7%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.0% repo

4.5% reverse repo

EGX30

3,570

+0.6% (YTD: +15.7%)

ADX

10,331

+0.3% (YTD: +9.7%)

DFM

6,166

+0.7% (YTD: +19.5%)

S&P 500

6,299

-0.5% (YTD: +7.1%)

FTSE 100

9,143

+0.2% (YTD: +11.9%)

Euro Stoxx 50

5,250

+0.1% (YTD: +7.2%)

Brent crude

USD 67.64

-1.6%

Natural gas (Nymex)

USD 3.00

-0.4%

Gold

USD 3,434

0.0%

BTC

USD 113,903

-1.2% (YTD: +21.8%)

Sukuk/bond market index

912.67

+0.2% (YTD: +1.2%)

S&P MENA Bond & Sukuk

147.50

+0.2% (YTD: +5.4%)

VIX (Volatility Index)

17.85

+1.9% (YTD: +2.9%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.8% yesterday on turnover of SAR 5.5 bn. The index is down 9.3% YTD.

In the green: SPPC (+10.0%), Ades (+10.0%) and SIIG (+8.3%).

In the red: UCA (-7.9%), Nice One (-7.1%) and Gulf Union Alahlia (-5.2%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.1% yesterday on turnover of SAR 22.7 mn. The index is down 14.7% YTD.

In the green: Horizon Educational (+5.9%), Balady (+4.6%) and Taqat (+4.4%).

In the red: NGDC (-9.0%), Future Care (-7.6%) and Arabica Star (-7.6%).

CORPORATE ACTIONS-

Alamar Foods will distribute SAR 25.3 mn in dividends for 2Q 2025 at SAR 0.50 apiece, starting 2 September, it said in a disclosure to Tadawul yesterday.

Almasane Alkobra Mining tapped SNB Capital as the market maker for its shares for 12 months starting Tuesday, 5 August, according to a Tadawul disclosure. The move follows the approval of the Capital Market Authority.

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