--- title: "Morningstar Q2 U.S. Stock Outlook: Geopolitical Shocks Intensify Volatility, AI Stocks Need Clearer Evidence for Further Gains" type: "News" locale: "en" url: "https://longbridge.com/en/news/281318878.md" description: "Morningstar Chief Strategist Dave Sekera pointed out in the Q2 2026 outlook for U.S. stocks that escalating geopolitical risks have led to increased volatility in the U.S. stock market, although the overall range of volatility remains small. The AI investment boom has provided momentum for the market, but clearer evidence is needed to support its revenue growth. The earnings season for the first quarter will begin on April 13, marking a critical moment to assess the effectiveness of AI capital expenditures. Currently, U.S. stock valuations are reasonable, but they face challenges such as macroeconomic slowdown, inflationary pressures, and rising interest rates, requiring investors to remain cautious" datetime: "2026-04-01T07:15:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/281318878.md) - [en](https://longbridge.com/en/news/281318878.md) - [zh-HK](https://longbridge.com/zh-HK/news/281318878.md) --- # Morningstar Q2 U.S. Stock Outlook: Geopolitical Shocks Intensify Volatility, AI Stocks Need Clearer Evidence for Further Gains According to the Zhitong Finance APP, Dave Sekera, Chief Strategist for the U.S. Market at Morningstar, stated in the latest "2026 Q2 U.S. Market Outlook" that volatility in the U.S. stock market will be significantly higher in 2026 compared to 2025, with geopolitical risks rapidly becoming a reality. Although the overall market volatility is less than 7%, beneath the surface, sector rotation is extremely intense. Additionally, the AI investment boom over the past two years has provided strong momentum for the stock market; however, the related optimism has mostly been reflected in current stock prices. To drive further increases in AI-related stocks, investors need to see clearer evidence that AI capital expenditures can translate into actual revenue growth, improved operational efficiency, and expanded operating profit margins. The first quarter earnings season will begin in the week of April 13, which will be an important time to assess the effectiveness of AI capital expenditures. Dave pointed out that the current valuation of the U.S. stock market is relatively reasonable, with a discount of about 12% compared to Morningstar's fair value. Whenever there are signs of easing in the U.S.-Iran conflict, the market shows a willingness to rise; however, unless Iran publicly signals a willingness to negotiate, the rebound will be limited. If oil prices remain high, corporate management may issue more conservative earnings guidance in response to rising uncertainty. At the same time, the macro environment is deteriorating: economic growth is slowing, inflationary pressures are re-emerging, and interest rates are on the rise. This puts the Federal Reserve in a dilemma, as it cannot easily lower interest rates without stimulating inflation, nor can it raise rates without exacerbating the risk of economic slowdown. Dave Sekera concluded that the U.S. stock market faces multiple challenges in 2026, including geopolitical uncertainty, the effectiveness of AI capital expenditure conversion, and a deteriorating macro environment. 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