When most Wall Street forecasters turned pessimistic during April's panic selling, Morgan Stanley's Michael Wilson and former Wells Fargo Securities strategist Christopher Harvey stood firm in their bullish stance. The market has now proven them right.

Since the April selloff, US equities have largely ignored economic risks posed by President Donald Trump's trade policies, instead climbing to record highs. This rally has been fueled by bets on artificial intelligence technological advances and tariff rates that came in lower than expected. The latest surge was driven by an inflation report that reinforced expectations for the Federal Reserve to resume rate cuts next month.

The S&P 500 has surged 30% from its April lows, forcing sell-side strategists who abandoned their bullish views in April to reverse course once again, raising their forecasts to keep pace with a rally few had anticipated.

"When market sentiment turns negative, it's easy to retreat, but that's often when discipline matters most," said Dave Mazza, CEO of Roundhill Investments. "Great strategists trust their methodology rather than market volatility. Now, for those who didn't retreat, that discipline appears very wise."

**Wall Street Institutions Repeatedly Adjust US Stock Forecasts**

Wilson maintains his 12-month S&P 500 target of 6,500 points, slightly above the index's current level, and advises clients to buy on dips. Harvey holds his year-end forecast of 7,007 points, among the highest predictions on Wall Street, as he expects rate cuts and deregulation to drive market gains.

"We've seen Trump 1.0 before. We know his style - go full throttle, then pull back. Additionally, fundamentals remain solid," Harvey said before leaving Wells Fargo last month, attributing this primarily to the strength of major technology companies.

Meanwhile, Wilson credits his optimism to Morgan Stanley's sentiment indicator, which showed "significant selling" on April 7, along with a substantial recovery in earnings revision breadth - a metric measuring the number of analysts raising rather than lowering earnings expectations.

"Combining these two indicators, the market rebound momentum should be quite strong," Wilson said Wednesday. "We anticipated this selloff in our initial 2025 forecast - expecting the new administration to announce aggressive policies in the first half. They did exactly that, just faster and more forcefully than we expected."

April's stock market plunge shook the confidence of many forecasters who had been optimistic at the year's start. In December, 19 strategists tracked by Bloomberg averaged a forecast of 13% gains for the S&P 500 this year, targeting 6,614 points. By May, these strategists had dramatically reduced expectations to just 2% gains - the fastest downward revision since the pandemic's early days in 2020. By June, many had turned bullish again.

Wednesday saw the S&P 500 close at 6,466.58 points, representing a 10% gain for the year.

Some prominent bulls, including BMO Capital Markets strategist Brian Belski and Deutsche Bank's Binky Chadha, also correctly predicted the market would recover before year-end. However, even they made adjustments in April, lowering their S&P 500 forecasts to reflect the index's approach toward bear market territory amid sustained sharp declines.

Such changes are rare, as strategists typically take long-term perspectives, relying on models designed to predict market performance. However, this approach has repeatedly faced challenges during Trump's presidency, as his frequent policy shifts continuously alter market prospects.

Wilson and Harvey's unwavering optimism now appears prescient, particularly as peers at Goldman Sachs Group, Citigroup, and Bank of America have had to revise their outlooks.

"When examining risk asset markets from a top-down perspective, you must balance two often conflicting frameworks: short-term volatility and medium-term fundamentals," said Dan Greenhaus, Chief Economist and Strategist at Solus Alternative Asset Management. "While we often say to ignore the former, occasionally short-term volatility impacts fundamentals. The ability to discern when volatility transmits - especially when it doesn't - often determines whether investors 'make their mark' or 'fade into obscurity.'"