Moody's has downgraded the U.S. sovereign credit rating from AAA to Aa1, causing ripples in global markets. U.S. stock futures experienced a sharp decline; however, Morgan Stanley strategist Michael Wilson asserts that this presents a "once-in-a-lifetime buying opportunity."

Wilson noted that although Moody's credit downgrade pushed the 10-year U.S. Treasury yield above 4.5%, fears of a recession in the U.S. stock market have significantly diminished, supported by a truce in U.S.-China trade and China’s reduced massive sales of U.S. bonds. He emphasized, "We will take advantage of this pullback, as the market will continue to rebound due to impressive corporate earnings and positive trade agreements."

In fact, after Fitch and S&P downgraded the U.S. ratings earlier in 2023, Moody's became the last major agency to act. Following the news, S&P 500 futures fell 1.2%, and the Dow Jones also declined. Nonetheless, both Morgan Stanley and Goldman Sachs remain optimistic, expecting the U.S. tech stocks to lead the recovery. Goldman Sachs strategist David Kostin stated that despite underwhelming performance in recent months, the seven mega-cap tech stocks—Apple, Microsoft, Amazon, Meta, Alphabet, NVIDIA, and Tesla—are projected to outperform the market due to continued strong earnings.

Wilson also added that following the recent earnings season, corporate revenues generally exceeded expectations, and uncertainty surrounding tariffs did not impact profits as severely as anticipated, instilling confidence in the market. He remains optimistic that even if future trade data appears somewhat weak, market sentiment has turned positive, and buying interest will emerge at any moment.