The longest run of earnings upgrades in 5 years just ended. Morgan Stanley sees 7% downside before the earnings rebound

This is where the market gets uncomfortable. Rising prices can survive bad news for a while when earnings estimates keep moving higher. Once estimates turn down, that cushion disappears and the valuation starts doing all the work.

The longest run of earnings upgrades in 5 years just ended.

For the first time in 23 weeks, more analysts are cutting S&P 500 profit forecasts than raising them. The estimate tailwind that carried this rally is gone. Morgan Stanley says stocks could give back up to 7%.

Prices… pic.twitter.com/eF8tcdABEj

— Kurt S. Altrichter, CRPS® (@kurtsaltrichter) September 23, 2026

Morgan Stanley sees up to 7% S&P 500 downside

https://finance.yahoo.com/markets/stocks/articles/morgan-stanley-wilson-says-us-082353803.html

Morgan Stanley’s Michael Wilson said the S&P 500 could fall as low as 7,100, roughly 7% below the level at the time, if higher energy prices and tighter financial conditions push valuations lower. He still expected earnings to support a later recovery toward year-end.

Wall Street’s 23-week earnings upgrade streak ends

https://finance.yahoo.com/markets/stocks/articles/analysts-snap-longest-run-us-102439029.html

This is the actual trigger. Citi’s revision index went net negative after 23 straight weeks of upgrades. Bloomberg says the weakness is showing up particularly in consumers, materials and financials.

S&P 500 gets hit by oil and Treasury yields

https://www.fidelity.com/news/article/us-markets/202609231600RTRSNEWSCOMBINED_L6N45F140_1

Reuters reported that the S&P 500 fell Wednesday as Treasury yields climbed and oil jumped almost 4%. The 10-year yield reached its highest level since 2007.