New York, February 28, 2026, 14:45 EST — The market is closed.
- Morgan Stanley shares took a sharp dive in Friday’s final February session, as financial stocks broadly came under pressure.
- Banks and brokerages stayed under pressure, weighed down by hot inflation numbers and renewed talk of credit losses.
- Attention turns to rates, fresh credit headlines, and Morgan Stanley’s new move into crypto custody.
Morgan Stanley (MS) dropped 6.2% to finish at $166.51 on Friday, erasing the previous day’s 2.2% advance. The shares traded between $174.13 and $164.40 before settling in, and saw minimal movement after the bell. StockAnalysis
This decline landed on the month’s final trading session, a moment when positioning often gets tangled and fresh risk calculations come into play. As March gets underway, the market looks shakier on rate cuts and twitchier around credit.
Morgan Stanley sits right where markets and corporate sentiment meet. A flurry of client trading, hedging, or capital-raising can send revenue jumping. But when caution takes over, deal fees and underwriting slow down in a hurry.
Wall Street closed Friday with losses, marking the worst monthly percentage drop in a year as financials and tech led declines. The Dow gave up 1.05%, the S&P 500 slipped 0.43%, and the Nasdaq lost 0.92%. “To wrap up the month of February, we were reminded there are still some cracks out there,” said Ryan Detrick, chief market strategist at Carson Group. Financial names struggled after news broke that Barclays, Jefferies, Wells Fargo, and others could face losses linked to the collapse of UK mortgage provider Market Financial Solutions Ltd. Reuters
Inflation data dialed up the heat. The Producer Price Index (PPI), which tracks what U.S. producers charge, jumped 0.5% in January. Strip out food and energy, and the “core” PPI surged 0.8%. “We expect the Fed to remain on pause during its upcoming March meeting,” said Ben Ayers, senior economist at Nationwide. Reuters
Banks and brokerages face a double-edged sword with rates like these. Yes, higher yields boost interest income. But they can just as easily crimp risk appetite and put a damper on new issuance, especially if investors push for a fatter premium.
In a move unrelated to Friday’s tape, Morgan Stanley has filed to launch a national trust bank dedicated to crypto, dubbed Morgan Stanley Digital Trust, National Association, a document from the Office of the Comptroller of the Currency shows. The application outlines plans for the new arm to offer custody for select digital assets, facilitate buying, selling, swaps and transfers, and provide customer “staking” services—letting clients earn rewards for blockchain validation—under a fiduciary framework. According to American Banker, the initiative ties into Morgan Stanley’s strategy to team up with crypto infrastructure firm Zerohash, aiming to enable E-Trade brokerage customers to trade major cryptocurrencies. American Banker
Still, if this selloff escalates beyond typical month-end volatility, the stock faces a different risk. Another inflation reading above expectations, or more visible credit strains, might be enough to keep investors cautious—putting added pressure on banks, even if trading activity remains strong.
Markets are closed for now, but eyes are on Friday’s banking selloff—will the losses bleed into April? Meanwhile, Morgan Stanley’s crypto trust-bank application remains a live wire, either gaining steam or drawing scrutiny. The OCC’s public comment window for the proposed charter remains open until March 20, according to the agency’s corporate applications docket. apps.occ.gov
