New York, Feb 3, 2026, 15:33 EST — Regular session
- Morgan Stanley shares dip, ending a brief winning run.
- Financials and dealmakers remain under pressure amid a broader risk-off mood.
- Traders focus on the yield curve story amid a packed earnings schedule.
Morgan Stanley (MS) shares slipped $3.38, or 1.8%, closing at $181.72 in late afternoon trading Tuesday.
The decline came after Monday’s 1.26% jump to $185.10, ending a streak of three straight gains. The stock still trades roughly 4% under its 52-week peak of $192.68, reached Jan. 16, according to MarketWatch data. (MarketWatch)
The selloff hit as U.S. stocks fell on concerns that new AI tools might pressure software makers and upend expectations for tech spending. A partial U.S. government shutdown has delayed crucial jobs data, fueling uncertainty. Art Hogan of B. Riley Wealth noted investors are “seeing a lot of software companies … get hit,” while John Campbell at Allspring Global Investments described the market as “expensive” and “priced for perfection.” (Reuters)
In the financial sector, the Financial Select Sector SPDR ETF dropped roughly 1.1%. Goldman Sachs slid around 1.5%, but JPMorgan Chase climbed about 1.3%.
Bank shares also hinge on the yield curve—the difference between short- and long-term Treasury rates. A steeper curve tends to boost lenders by expanding the gap between borrowing costs and loan rates. Yet, rising long-term yields can tighten financial conditions and weigh on risk assets.
Investors are stepping up bets on a steeper yield curve as Kevin Warsh edges closer to the Federal Reserve’s top spot. Markets are juggling expectations of rate cuts alongside a shrinking Fed balance sheet. Jim Barnes from Bryn Mawr Trust noted these two forces can “go in opposite directions.” Rate futures still price in about two quarter-point cuts in 2026, with the first likely at the June 16-17 meeting, Reuters reports. (Reuters)
For Morgan Stanley, where markets activity and wealth fees dominate, daily mood swings can weigh just as heavily as the yield curve.
On Monday, Morgan Stanley Finance LLC submitted a prospectus supplement for a new offering, continuing its regular issuance of market-linked products. (SEC)
Apartment Investment and Management Company revealed in a separate filing that it hired Morgan Stanley as its lead financial adviser on a potential deal, turning to the bank again as it advanced plans for a sale and liquidation. (SEC)
The downside is clear. If the shutdown fight drags on and rate volatility spikes, deal timelines could slip, and clients might avoid risk. That’s a fast track to shrinking underwriting and advisory fees, and a slower drag on wealth inflows if markets remain unsettled.
Earnings are next on the docket: Alphabet is set to report after Wednesday’s close, with Amazon following after Thursday’s bell. These two reports could shift risk appetite as the week wraps up. (Investopedia)
