NEW YORK, Jan 26, 2026, 13:30 (EST) — Regular session
- Morgan Stanley shares climbed 1.5% in afternoon trading, outperforming most of its large U.S. banking peers
- Investors are bracing ahead of Wednesday’s Federal Reserve policy announcement
- Washington headlines about banks and credit card rates continue to sway the market
Morgan Stanley shares climbed 1.5%, reaching $181.61 in early afternoon trading on Monday. During the session, the stock fluctuated between $178.00 and $182.27.
Investors are bracing for a U.S. Federal Reserve meeting kicking off Tuesday, alongside a packed week of mega-cap earnings—events that could swiftly alter risk appetite. Chris Larkin at E*Trade, affiliated with Morgan Stanley, warned that Wednesday’s Fed announcement “will likely keep politics in the headlines.” 1
For Morgan Stanley, the balance is key. Its trading and wealth management arms gain from steady client activity, but the investment bank depends heavily on deal flow—which can stall when market sentiment turns cautious.
Shares followed the broader banking sector on Monday. Goldman Sachs climbed roughly 1.1%, Wells Fargo added 1.3%, JPMorgan increased by 0.8%, and Bank of America rose 0.7%.
Investors continue to digest Morgan Stanley’s January 15 earnings, which topped profit forecasts thanks to a surge in dealmaking and underwriting. Investment banking revenue soared 47%, while CFO Sharon Yeshaya told Reuters the firm is witnessing “an accelerating pipeline” in both mergers and acquisitions (M&A) and initial public offerings (IPOs). 2
Washington remains a factor for bank stocks. President Donald Trump’s escalating feud with Wall Street now features a lawsuit targeting JPMorgan and a push for a one-year 10% cap on credit card interest rates. Banks caution the move could restrict access to credit. 3
The most straightforward risk this week is a policy shock rattling rates markets. The Fed is widely expected to keep rates unchanged at 3.50%-3.75%. Still, it faces renewed pressure on its independence following a Justice Department probe into Chair Jerome Powell. This development could unsettle bond yields and bank stocks. 4
Wednesday’s Fed decision takes center stage, followed closely by guidance from major tech earnings this week. These factors will determine if the broader rally holds—and if Morgan Stanley and its rivals maintain their upward momentum.
